Premium
The Opportunity Cost of the Conservation Reserve Program: A Kansas Land Example
Author(s) -
Taylor Mykel R.,
Hendricks Nathan P.,
Sampson Gabriel S.,
Garr Dillon
Publication year - 2021
Publication title -
applied economic perspectives and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.4
H-Index - 49
eISSN - 2040-5804
pISSN - 2040-5790
DOI - 10.1002/aepp.13040
Subject(s) - conservation reserve program , opportunity cost , productivity , land values , agricultural economics , agriculture , land use , natural resource economics , business , economics , geography , ecology , economic growth , microeconomics , archaeology , biology
The effects of the Conservation Reserve Program (CRP) on farmland values is investigated using a set of parcel‐level data for land sales in Kansas over the period 1998 to 2014. The sales data are used to estimate a hedonic model of land values that allows for the opportunity cost of CRP enrollment to vary across space and time. Factors impacting the opportunity costs include the relative productivity of land, returns to farming, and the time remaining under the CRP contracts. We find that the discount associated with having land under CRP contract averages 7%.