Tax Incentives and the Price of Conservation

Dominic Parker and Walter Thurman

Journal of the Association of Environmental and Resource Economists, 2018, vol. 5, issue 2, 331 - 369

Abstract: We study the role of tax incentives in promoting a fast-growing and novel type of conservation: voluntary, permanent restrictions on private land use through conservation easements. In the United States, easements represent the largest charitable gift on a per-donation basis, but skeptics wonder if their tax preference merely subsidizes wealthy landowners rather than inducing conservation. We incorporate federal and state income tax codes into a calculator to quantify the after-tax donation price and demonstrate its sensitivity to landowner income and state and federal policies. Using a 1987–2012 panel, we measure the response of state-level easements to the price. Our large elasticity estimates, spanning −2.4 to −6.1, indicate that tax incentives induce conservation and do not merely subsidize it. We find no evidence that generous tax benefits have caused less strategic patterns of land conservation.

Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://dx.doi.org/10.1086/695615 (application/pdf)
http://dx.doi.org/10.1086/695615 (text/html)
Access to the online full text or PDF requires a subscription.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucp:jaerec:doi:10.1086/695615

Access Statistics for this article

More articles in Journal of the Association of Environmental and Resource Economists from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().