Estimating the Impact of Critical-Habitat Designation on the Values of Developed and Undeveloped Parcels

Abstract

We used the quasi-experimental difference-in-differences method to estimate the impact that the Endangered Species Act’s (ESA’s) critical-habitat (CH) regulation had on developed and undeveloped parcel prices throughout the United States between 2000 and 2019. At the national level we find that, on average, the prices of parcels in CH areas were not statistically different from the prices of similar nearby parcels not in CH. However, limiting our analysis to specific subsets of CH areas, we find mixed results. Previous empirical estimates have consistently found that the regulation reduces parcel prices. We offer several potential explanations for our contradictory results.