Equilibrium Behavior in the Conservation Easement Game

Conservation easements allow landowners to collect earnings from their land, while reducing their tax burdens because the land cannot be sold into development. Conservation assures open space amenities for nearby residents, however, the residents bear a tax increase that offsets the owner's tax...

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Bibliographic Details
Published in:Land economics 2004-08, Vol.80 (3), p.355-374
Main Authors: Anderson, Christopher M., King, Jonathan R.
Format: Article
Language:English
Subjects:
Conservation
Conservation easements
Easements
Environment
Equilibrium
Game theory
Income taxes
Land conservation
Land development
Land economics
Land trusts
Land use
Landowners
Nash equilibrium
Property taxes
Public goods
Social welfare
Studies
Tax incentives
Tax increases
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Summary:Conservation easements allow landowners to collect earnings from their land, while reducing their tax burdens because the land cannot be sold into development. Conservation assures open space amenities for nearby residents, however, the residents bear a tax increase that offsets the owner's tax reduction. We develop a gametheoretic model of the private monetary incentives induced by conservation easement programs, and use an experiment to verify that conservation decisions are made based on private incentives and without consideration of the public goods conservation provides. This implies that, unless land trusts are discriminating, conservation easements need not lead to optimal conservation, and may even reduce social welfare.
ISSN:0023-7639
1543-8325
DOI:10.2307/3654726