Competition-Based Environmental Policy: An Analysis of Farmland Preservation in Maryland

John K. Horowitz, Lori Lynch and Andrew Stocking

Land Economics, 2009, vol. 85, issue 4, 555-575

Abstract: Policy makers have turned to competition- based voluntary-enrollment programs as a cost-effective way to achieve preferred land uses. This paper studies bidder behavior in an innovative auction-based program in which farmers compete to sell and retire the right to develop their land. We derive a reduced-form bidding model that includes private and common values. This model allows us to estimate the role of bidder competition, winner’s curse correction, and the underlying distribution of private values. We estimate that the auction enrolled as many as 3,000 acres (12%) more than a take-it or- leave-it offer would have enrolled for the same budgetary cost

JEL-codes: Q24 Q28 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (16)

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Working Paper: Competition-Based Environmental Policy: An Analysis of Farmland Preservation in Maryland (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:uwp:landec:v:85:y:2009:i:4:p:555-575

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