Farmland Preservation and Differential Taxation: Evaluating Optimal Policy Under Conditions of Uncertainty

Robert Johnston

Agricultural and Resource Economics Review, 2003, vol. 32, issue 2, 11

Abstract: Differential property tax policy for farmland is often set under conditions of uncertainty and limited information regarding landowners' objective functions. This study examines optimal differential tax policy for a parcel of agricultural land facing uncertain development, identifying instances in which common farmland taxation policies may be non-optimal. Optimal tax rates are characterized given three possible causes of uncertain development: exogenous offers from developers, tax-related reductions in landowner wealth, and a combination of these factors. Model results indicate that underlying causes of uncertain development are critical when seeking to assess the optimality of differential taxation policies, and the use of a single, time-invariant differential tax levy is rarely optimal given uncertain development.

Keywords: Agricultural; and; Food; Policy (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (3)

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Journal Article: Farmland Preservation and Differential Taxation: Evaluating Optimal Policy Under Conditions of Uncertainty (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:arerjl:31621

DOI: 10.22004/ag.econ.31621

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