CAPITALIZATION OF EXCLUSIVE AGRICULTURAL ZONING INTO FARMLAND PRICES

Several states, and many countries, have adopted exclusive agricultural zoning to control the location or amount of non-farm development in agricultural areas. This exclusive agricultural zoning differs from traditional rural zoning in that it limits development and is often strictly enforced. Economists have argued that conceptually, agricultural zoning lowers land values by restricting non-farm development. Economic theory predicts both positive and negative price effects, distributed differentially among farmland parcels depending on parcel characteristics. The purpose of this research is to test the hypothesis that the price effect of exclusive agricultural zoning varies with the characteristics of parcel subject to the regulations. -from Authors