Q24, Q57, Q58, C21
Q21 - Renewable Resources and Conservation: Demand and Supply (the Commons), Q24 - Renewable Resources and Conservation: Land, Q57 - Ecological Economics: Ecosystem Services; Biodiversity Conservation; Industrial Ecology, Q58 - Environmental Economics: Government Policy
We use differences-in-differences (DID) estimators to measure the impact that Critical Habitat (CH) establishment had on undeveloped and developed parcel prices throughout the US between 2000 and 2019. In a national-level analysis we found that CH “treatment” had a positive impact on developed and undeveloped parcel sale prices relative to sale price trends in nearby but “untreated” control parcels. The finding that CH treatment had a positive impact on undeveloped parcel prices was surprising as we had hypothesized that the impact of CH on undeveloped parcel prices would be negative due to the additional regulatory costs and development uncertainty the CH regulation imposes on land developers. However, when we used relevant subsets of CH areas to measure CH’s effects we often found results that were inconsistent with the national-level trends. Therefore, the impact of CH on land prices cannot be reduced to a simple, consistent narrative.
Mamun, Saleh; Nelson, Erik; and Nolte, Christoph, "Estimating the impact of Critical Habitat designation on the values of undeveloped and developed parcels" (2021). Economics Department Working Paper Series. 18.