Determinants of land-use transitions in the United States: Econometric analysis of changes among the major land-use categories

In an effort to better understand the factors affecting land-use changes and the potential impact of different land-use policies in the United States, this paper expands upon existing studies by (1) providing the first national econometric analysis of land-use changes to include all major land-use categories (crops, pasture, forests, urban, range, and Conservation Reserve Program); (2) developing a consistent framework for modeling changes in urban and non-urban land uses; (3) modeling a comprehensive set of transitions among land-use categories; and (4) estimating the influence of land quality on land-use transitions among a broad set of land-use alternatives. Refinements in data used allow for this expanded analysis. Using parcel-level observations of land-use changes and land quality from 1982 to 1997 and measures of county-level profits for the alternative land uses, I estimate an econometric model representing land-use change as a first-order Markov process. The results are used to calculate land-use transition probabilities and elasticities for these probabilities with respect to land quality and land-use profits. These estimates indicate the role of economic profits in spurring land-use transitions and important effects of land quality on the different transition probabilities and estimated elasticities. In addition, the results from a nested logit specification provide evidence of differential patterns of substitution among land uses based on relative land quality requirements. I also conduct a series of simulations to quantify the impact of historical changes in land-use profits on different land-use transitions from 1982 to 1997. This analysis reveals the importance of considering relative as opposed to absolute land-use profits in evaluating the impact of profit changes on land-use transitions. I highlight the implications of selected results for policy issues, including forestry policies for carbon sequestration and tax policies for restraining urban growth. The full set of results provides a basis for future simulations of nationwide land-use transitions under different economic and policy scenarios. Outcomes of such analyses can be used in developing economic incentive-based land-use policy approaches.