| Policymakers rely on economists and their models to determine when farmland should be protected from development through preservation policies. These models are necessary due to externalities, both positive and negative, which exist in the farmland market. Externalities pose a problem as they interfere with the market finding an optimal outcome automatically. These models provide insight into what actions should be taken, but they suffer from weaknesses which lessen their usefulness.; While numerous studies exist which analyze positive and negative externalities of farmland, few have jointly considered them within the same model. This may result in improper policy recommendations when positive and negative externalities offset each other. Numerous existing models of land preservation are analyzed and compared for their relative strengths and weaknesses in providing information to policymakers.; Some of the weaknesses in these models include a lack of a spatial consideration, ignoring the irreversibility of land conversion, failure to consider negative externalities, and a poor understanding of the impact of time on externality values. While market prices can be seen as a perfect indicator of future expectations in a well operating market, we have no such perfect measure when analyzing externalities. Instead, we have estimated values which do a poor job of reflecting how externality values can change over time due to increasing development.; Some solutions to these problems include utilizing data and analysis of a smaller scale, which would allow more accurate policy recommendations. This could include information on parcel by parcel preservation decisions. A greater number of land classes and the addition of dynamic modeling methods would also improve the quality of economic analysis in the field of farmland preservation. |
