A field-level analysis of easement effects on agricultural yields
Practice Job Talk
Agricultural & Applied Economics
University of Wisconsin - Madison
Wednesday, September 21, 2022
12:00 pm-1:15 pm
Taylor-Hibbard Seminar Room (Rm103)
Land conservation has become a main priority world-wide in order to mitigate the effects of climate change. Understanding the value and optimal prices of conserving land is an important step towards realizing this goal. I evaluate the costs and benefits of a major conservation policy, the Natural Resources Conservation Services Wetland Reserve Program. Novel remote sensing data allows for the identification of easement yield effects at the field-level. I estimate the forgone yields of retiring land from production and also find evidence that surrounding fields are affected by wetland easement restoration. Using a regression discontinuity framework, I find that easements decrease yields by 35 bushels per acre for corn (28% of average yields) and 14 bushels per acre for soybeans (43% of average yields). My findings suggest that easements mitigate losses by thousands of dollars per acre. Using an event study approach that accounts for staggered treatment timing, I also find that easements impacts surrounding yields within a few kilometers. Surrounding corn yields benefit from easements by 3-4 bushels per acre while soybean yields see reduced yields of 1-2 bushels per acre.