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The Impact of Wildlife Recreation on Farmland Values

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We investigate the salary returns to the ability to play football with both feet. The majority of footballers are predominantly right footed. Using two data sets, a cross-section of footballers in the five main European leagues and a panel of players in the German Bundesliga, we find robust evidence of a substantial salary premium for two-footed ability, even after controlling for available player performance measures. We assess how this premium varies across the salary distribution and by player position.

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... These differences can be due mainly to a willingness to pay for a location in the vicinity of the river, and particularly in cases where there is active speculation as to the conversion of farmland into non-agricultural use. Especially conversions for construction and use for residential or recreational purposes generally motivate buyers to pay for a river view or to be in the vicinity of a river enabling such recreational activities as fishing, canoeing or swimming (Henderson 2010). The willingness to pay prices for land in the vicinity of rivers up to several multiples of those for other lands nearby cannot be ascribed to agricultural use characteristics and higher fertility, as the relatively steep gradient in land price does not correspond to the gradient of soil fertility. ...
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Conversion of farmland to nonfarm uses significantly influences the spatial variability of farmland prices. We tested 12 factors of land prices that experienced real estate brokers indicated to be the most important determinants for conversion of farmland to non-agricultural use. Five factors can be described as landscape, four as geographic, and three as climatic explanatory variables influencing farmland prices. Our results indicate that the two most powerful factors in explaining the sales price per square meter were proximity to a river and proximity to a lake. In both cases, the price of land diminished significantly with increasing distance from the edge of the water body, so the prices in their immediate vicinity are 3.5 to 3.7 times higher than are prices of similar land more than 5 km from the edge of the water body. The other significant factors were population size of the nearest municipality and percentage representation of forest. The fact that the two most powerful factors indicate the distance to a river, brook, lake or pond shows how important are these freshwater features as determinants of farmland prices in a landlocked country such as the Czech Republic, where this study was performed. The consequences of this finding for water resources planning and management are discussed.
... Endnotes [1] Texas is probably an exception in which a large proportion of landowners provide fee-access and economists have started to factor in hunting lease income into land appraisals and other associated impacts on the economy ( Baen 1997, Torell et al. 2005, Henderson and Moore 2005. [2] Although the forest industry is actively engaged in the hunting lease market, insights gleaned from hunting leases on industry lands ( Roach et al. 1996) do not necessarily translate to NIP lands because the forest industry is motivated in part by nonpecuniary considerations such as community goodwill, arson reduction, protection from timber theft, and gaining leverage in anticipation of environmental regulations ( Busch and Guynn 1988, Marsinko et al. 1992, Brown et al. 2001). ...
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Selling hunting access may supplement household income, yet only a small proportion of nonindustrial private (NIP) landowners in United States lease the right to hunt their land. Based on a survey of Mississippi landowners, the decision to lease hunting rights and factors influencing lease revenue per leased hectare were analyzed. The two issues were jointly modeled consistent with Heckman's sample selection model, and the lease revenue was specified in accordance with hedonic pricing theory. Empirical results showed that landowner concerns about loss of privacy, accident liability, and conflicts with personal use of land reduced the likelihood of leasing; total landownership and specific landowner characteristics increased it. With regards to factors explaining differences in lease revenue per leased hectare, bottomland hardwoods commanded a greater premium than many other land uses. In addition, lease revenue per hectare was distinctly higher where a landowner had expertise in managing a hunting lease enterprise. These findings have implications for landowners interested in managing wildlife-associated enterprises and public agencies engaged in the provision of natural resource-based recreation.
... Information on hunting lease rates is becoming increasingly vital to many stakeholders (e.g., landowners, hunters, outfitters , financial institutions) as fee-access hunting becomes common across the United States (Mozumder et al. 2007; Henderson and Moore 2005; Baen 1997). Natural resource and university extension officials also need this information in designing natural resource conservation programs and local rural development projects (Torrell et al. 2005; Shrestha and Alavalapati 2004 ). ...
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Factors determining local hunting lease rates, and differences between rates across Mississippi regions, were analyzed using Blinder-Oaxaca decomposition procedures. Per acre rates were 26% greater in west versus east Mississippi. Depending on the decomposition procedure employed, differences in resource endowments accounted for 43% to 69% of the gap. Differences in habitat quality were primarily responsible. Lessors in east Mississippi can improve their rates by reducing lease sizes and shortening contract lengths. Information about differences in local lease rates and the sources of those differences is critically needed by landowners, outfitters, hunters, financial institutions, and natural resource managers.
... As noted by Bernardo et al. (2004), farms located near cities benefit from urban and suburban residents who take part in nearby recreational activities. Nonhuman factors also play a role, with recent research suggesting that natural amenities not only can provide consumers of onfarm recreation with a greater diversity of natural resources and more opportunities for recreation, but also can enhance farmland values (Henderson and Moore, 2005). Recognizing this potential, development specialists have become increasingly interested in the nature-based tourism sector (Reeder and Brown, 2005), even in parts of the country (such as the Northern Plains) often considered relatively poor in terms of natural amenities (Hodur et al., 2006). ...
Article
Farm-based recreation provides an important niche market for farmers, but limited empirical information is available on the topic. Access to two USDA databases, the 2004 Agricultural Resource Management Survey (ARMS) and the 2000 National Survey on Recreation and the Environment, provided researchers with a deeper understanding of who operates farm-based recreation enterprises, such as hunting and fishing operations, horseback riding businesses, on-farm rodeos, and petting zoos. Regression analysis identified the importance of various farmer and farm characteristics, as well as local and regional factors associated with farmer operation of, and income derived from, farm-based recreation.
... ignificant effect on the value of a deer hunting lease (Messonier and Luzar, 1990). Another hedonic study estimates the value of white-tailed deer from markets for hunting leases in Texas. The study showed that lease hunters were willing to pay $25 to be assured of harvesting one deer and an additional $13 to harvest another deer (Livengood, 1983). Henderson and Moore (2005) review other studies that document the effects of deer and deer densities on lease values and on land values more generally. ...
Article
Thesis (M.S.)--Michigan State University. Dept. of Agricultural Economics, 2006. Includes bibliographical references (leaves 92-96).
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Waterfowl management is inherently complex, given shifting population dynamics and intensifying social and economic interests. This qualitative case analysis provides an exploratory examination of the human dimensions of waterfowl management, specifically the beliefs, attitudes, and business responses of 15 representatives from 12 goose hunting clubs in southern Illinois. The region's waterfowl hunting industry is facing progressively northward shifts in goose migration and dramatically diminished harvests. We conducted in-depth personal interviews with hunting club owners and operators, transcribed and analyzed the interviews qualitatively, and interpreted participants' responses within the local and regional waterfowl management context. Case study findings reveal that although individual hunting clubs have implemented short-term coping mechanisms, the hunting club industry in southern Illinois looks to management for developing long-term adaptive response.
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Urban growth in many areas of the South has been accompanied by changes in land use and increases in rural land prices in the surrounding areas. The conversion of agricultural land to a nonagricultural use in an urbanizing area appears to have had a marked affect on rural land prices. The objective of this paper is to examine the impact of physical and locational characteristics of property on rural land prices in an urbanizing area.
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Two studies in the US found no consistent significant effects of proximity to a nuclear reactor on the price of local housing. The study presented here examines agricultural land values in a cross section of 494 market area regions. The hypothesis of a nuclear externality is tested by estimating a reduced form equation of the equilibrium average price of an acre of farmland in which the presence of a reactor is indicated by one or more dummy variables. The next section presents the theoretical model and develops the econometric specification. Next the data are described and then the results are reported. A discussion of possible confounding effects including tests of alternative hypotheses is next. A conclusion closes the paper, the major finding is that a significant negative externality on the value of agricultural land on a scale meaningful for energy policy is consistent with these empirical analyses. -from Authors
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Remote agricultural lands, which include wildlife habitat, angling opportunities and scenic vistas, command higher prices per hectare in Wyoming than those whose landscape is dominated by agricultural production. Geographic information systems (GIS) data are used to measure recreational and scenic amenities associated with rural land. A hedonic price model is specified with GIS measures. It is used to estimate the impact of amenity and agricultural production land characteristics on price per acre for a sample of Wyoming agricultural parcels. Results indicate that the specification performed well across several functional forms. The sampled land prices are explained by the level of both environmental amenities as well as production attributes. Statistically significant amenity variables included scenic view, elk habitat, sport fishery productivity and distance to town. This analysis permits a better estimation of environmental amenity values from hedonic techniques. Improved estimation of amenity values is vital for policies aimed at open space preservation, using agricultural conservation easements and land use conflict resolution.
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The lease hunting system in Texas is described and discussed. Results of a hunter survey are reported and the value of ingress rights for white-tailed deer hunting in Texas is estimated. Results suggest that these rights are highly valuable and that services and facilities provided generally do not enhance the value of the hunting experience as much as access to additional game species on adequately large parcels of land.
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This study considers the evolution and explosion growth of recreational hunting leases in America. The traditional European practice of leasing rural lands for the exclusive rights of tenants to hunt and fish is now an important revenue source for American agricultural land investors/owners. Hunting lease income can enhance value to the point that recreation becomes the highest and best use of rural land for both the market and income approaches to valuation. This study offers new perspectives for valuing the income component from recreational leases as a percentage of market value and proposes a hunting lease index for land owners and tenants to consider.
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The recreational and aesthetic value of wildlife is partly reflected in the Texas hunt lease system and rural land markets. The results of an extensive survey of Texas hunters and a land valuation model are utilized to develop estimates of the value of wildlife in Texas. Although this cannot be precisely calculated, estimates clearly indicate that wildlife is a valuable natural resource.-Authors
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The dynamic response of real farm asset values to changes in net returns and interest rates is studied using vector autoregression. Results show that a shock in real asset values, real returns to assets, or real interest rates leads to a process in which real asset values overreact. In the initial period, a reaction to a shock immediately occurs followed by a continued build-up in the asset value for up to six years until finally the effect of the one-time, transitory shock begins to die out. The results suggest a market with a propensity for bubbles.
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The theoretical and empirical relationship between farm-based residual returns, the opportunity cost of farmland, and farmland prices is developed. Temporal hypotheses concerning the source of land price movements are tested using a variant of Granger causality. In the aggregate, farmland prices are found to be unidirectionally “caused” by residual farm-based returns. The findings support the hypothesis that farmland prices are determined mainly within the farm sector and lend credence to the use of extrapolative expectations processes in structural farmland price models.
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An econometric model is formulated to explain the dynamic behavior in farmland prices. A second-order rational distributed lag on net crop-share rents received by landlords captures the dynamic movements of prices and performs well in conditional post-sample forecasts. The adjustment path of land prices in response to a perturbation in rents is a protracted dampened cycle. The implicitly estimated tax-free capitalization rate on rent associated with equilibrium land price is 4.0%. Neither the expected rate of inflation nor an exponential trend on rent expectations has a significant effect on land prices.
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The research reported demonstrates that farm real estate price involves important components in addition to the capitalized value of rent for the services of land and buildings in farm production, develops an expectations model for the farm real estate market, and compares predictions from the expectations model with farm real estate prices for the 1920–78 period. Capitalized rent explains only about half of real estate values both in the 1970s and over the longer 1920–78 period. The remainder can be explained by the capitalization of capital gains, including real gains or losses from price level changes.
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Incorporates subjective expectations into a bid-price model for rural land in an urban fringe market. Presents a conceptual bid-price model for rural land in which the role of subjective expectations is explicitly acknowledged. This conceptual model is then applied to cross-sectional sales data on vacant rural land from a rapidly growing county adjacent to Portland, Oregon.-from Authors
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Explores the natural and mand-made factors that affect the price of farmland in an urban fringe market, including factors not reported in previous studies. An hedonic price model for an urban fringe farmland market near Chicago, Illinois is developed and estimated empirically. The model is presented with expectations about the impacts of land characteristics and institutional factors on urban fringe farmland prices. The study area, data and model estimates are described and the implications discussed.-K.Turner
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Weather in the Corn Belt and northern plains and the elimination of traditional commodity programs have refocused attention on farmland valuation. This study uses a statistical formulation of information provided by individual regressors to examine the sensitivity of farmland values to changes in inflation, returns on agricultural assets, and the cost of capital. The results indicate that inflation provides the most information on changes in farmland values; however, the regional results indicate that regions that tend to be more sensitive to changes in the return on agricultural assets also rely more heavily on government payments.
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The marginal values of different open space attributes are tested using a hedonic pricing model with residential sales data from central Maryland. The identification problems that arise due to endogenous land use spillovers and unobserved spatial correlation are addressed using instrumental variables estimation with a randomly drawn subset of the data that omits nearest neighbors. Results show a premium associated with permanently preserved open space relative to developable agricultural and forested lands and support the hypothesis that open space is most valued for providing an absence of development, rather than for providing a particular bundle of open space amenities.
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We investigate the salary returns to the ability to play football with both feet. The majority of footballers are predominantly right footed. Using two data sets, a cross-section of footballers in the five main European leagues and a panel of players in the German Bundesliga, we find robust evidence of a substantial salary premium for two-footed ability, even after controlling for available player performance measures. We assess how this premium varies across the salary distribution and by player position.
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Climate, topography, and water area are highly related to rural county population change over the past 25 years. A natural amenities index, derived and discussed here, captures much of this relationship. Average 1970-96 population change in nonmetropolitan counties was I percent among counties low on the natural amenities index and 120 percent among counties high on the index. Most retirement counties and recreation counties score in the top quarter of the amenities index. Employment change is also highly related to natural amenities, although more so over the past 25 years than in the current decade. The importance of particular amentities varies by region. In the Midwest, for example, people are drawn to lakes for recreation and retirement, while people are attracted to the West for its varied topography.
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The impact of recent changes to the U.S. commodity program and efficacy of environmental regulations designed to discourage continuous corn rotations will depend upon the value farmers place on corn base acreage. This paper estimates this value by assuming that the benefits of access to the program are capitalized into farmland rents. Using Iowa rental survey data and a hedonic pricing approach, the rent gradient for base acreage is found to be on the order of 12peracre.Thediscountedstreamofreturnstobaseacreagesuggestsanassetvalueforcornbaseofapproximately12 per acre. The discounted stream of returns to base acreage suggests an asset value for corn base of approximately 200 per acre.
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This paper develops a structural model of land prices which includes the multidimensional effects of inflation on capital-erosion, savings-return erosion, and real debt reduction as well as the effect of changes in the opportunity cost of capital. The results show that inflation and changes in the real returns on capital are major explanatory factors in farmland price swings in addition to returns to farming. Additionally, the effects of credit market constraints and expectations schemes are considered explicitly in the analytical model.
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