New Models and Methods for Efficient Land Conservation
- Author(s): Johnsen, Reid
- Advisor(s): Rausser, Gordon C
- et al.
This dissertation presents a series of essays that illustrate opportunities for improving the
economic efficiency of conservation easement purchases and land conservation in general.
Each essay provides concrete methods to address a current issue in conservation easement
purchasing or valuation.
The first essay explores the relationship between the degree to which landowners identify as
ranchers and their preferences between a lump sum and a perpetuity form of compensation.
Using original survey data from 231 California landowners in Sonoma and Marin Counties, we
elicit measures of rancher identity and preferences among three compensation packages for the
sale of a conservation easement. We find that the majority of participating landowners prefer
a perpetuity over a lump sum, suggesting that conservation groups could more efficiently
conserve land by offering a perpetuity payment option. By randomly perturbing the identity
salience of some landowners, we attempt to determine the causal impact of identity on
preferences. Although our results lack statistical power, they provide suggestive evidence in
support of the hypothesis that preference for a perpetuity over a lump sum is a function of
identity as a rancher.
The second essay addresses one of the key challenges in calculating return on investment
(ROI) for a conservation easement purchase. From the perspective of a land conservation
group, the three components of ROI for a conservation easement are the value of ecosystems
services (ES) that the conserved property provides, easement price, and probability of
development under a counterfactual scenario in which the easement had not been enacted.
In this essay we assess the relative importance of uncertainly in ecosystem service values
compared to uncertainty in land development projections. To do so we estimate the value
of the ecosystems services provided by 19 conservation easements held by a California land
trust, based on ES values from 9 stated preference studies. For each property we then
consider 3 plausible counterfactual development scenarios, resulting in a total of 27 different
valuations (3 counterfactuals x 9 ES values). Pairwise analysis suggests that, while the impact
of both choices is large, the choice of counterfactual has a substantially larger impact on ES
value than the choice of ES value transfer study. In our study area, choosing an alternative
counterfactual scenario changes the valuation by an average of 648% relative to the base case,
while choosing an alternative value transfer study changes the valuation by an average of 132%.
The third essay assesses whether the easement price information in property appraisals
contains any information, aside from easement price, that impacts conservation group ROI.
Before a conservation easement is sold an appraisal is usually commissioned in order to
determine the value of the conserved property before and after the easement is put into
place. The difference between these two values is the appraised value of the easement, which
represents the value of the easement to the landowner. However, since landowners and
conservation groups have very different objective functions, the value of the easement to
the landowner is not necessarily equal to the value of the easement to a conservation group.
Using a dataset of 36 appraisals for conserved California rangeland, we test the hypothesis
that ecosystems service value is correlated with appraised value. We also test the hypothesis
that counterfactual conservation easement value, which is the value of the easement to a
conservation group, is captured in appraised value. We find that ecosystems service value is
highly uncorrelated with appraised value, and that counterfactual easement value is slightly
positively correlated with, though non-linearly related to, appraised value.