Graduation date: 2008
Private land-use decisions can have important effects on private and public welfare. Market-based policies to regulate land use have the potential to move the privately-optimal allocation of land closer to what is socially optimal. To implement these policies in the Rocky Mountain states, it is necessary to understand the effects of private net returns on landowner choices. Two types of models are estimated to investigate these effects. The first is a conditional logit model. Here, parcel-level land-use choices are modeled in response to net returns, land quality, and other variables. The second is an area base model estimated using county aggregate land-use data. A generalized least squares model is estimated to adjust for heteroskedasticity that results from the specification. Land-use shares and transitions are dependent variables, while net returns, land quality, temperature, elevation, precipitation, and hospitality sector sales are the independent variables. For the aggregate land-use transition model, a specification that normalized net returns on range net returns returned all of the expected results. Results for both types of models suggest that it is necessary to control for land-use heterogeneity in this region by adding variables such as temperature, precipitation, and elevation. The Rocky Mountain region has more heterogeneous conditions than most other regions of the United States. With its vast areas of relatively low-value range land, this region offers promise for low-cost land conversion policies, but further research is necessary to understand the influence of a heterogeneous environment on land-use decisions.