2003. Capitalization of Open Spaces into Housing Values and the Residential Property Tax Revenue Impacts of Agricultural Easement Programs. Agricultural and Resource Economics Review 32(1): 33–45

Using a unique spatial database, a hedonic model is developed to estimate the value to nearby residents of open space purchased through agricultural preservation programs in three Maryland counties. After correcting for endogeneity and spatial autocorrelation, the estimated coefficients are used to calculate the potential changes in housing values for a given change in neighborhood open space following an agricultural easement purchase. Then, using the current residential property tax for each parcel, the expected increase in county tax revenue is computed and this revenue is compared to the cost of preserving the lands. Key Words: agricultural preservation, hedonic models, open space, spatial econometrics The preservation of open space has become an important policy issue in the United States as con-version of land in forestry and agricultural uses into residential and commercial uses continues. From 1982 to 1992, approximately 6.2 million acres of agricultural land and 5.1 million acres of forest land were converted to urban and other developed uses in the United States (Vesterby et al., 1997). In the Washington, DC, metropolitan area, the rate at which land is being consumed exceeds the populatio