PT  - JOURNAL ARTICLE
AU  - John K. Horowitz
AU  - Lori Lynch
AU  - Andrew Stocking
TI  - Competition-Based Environmental Policy: An Analysis of Farmland Preservation in Maryland
AID  - 10.3368/le.85.4.555
DP  - 2009 Nov 01
TA  - Land Economics
PG  - 555--575
VI  - 85
IP  - 4
4099  - http://le.uwpress.org/content/85/4/555.short
4100  - http://le.uwpress.org/content/85/4/555.full
SO  - Land Econ2009 Nov 01; 85
AB  - Policy makers have turned to competition-based voluntary-enrollment programs as a cost-effective way to achieve preferred land uses. This paper studies bidder behavior in an innovative auction-based program in which farmers compete to sell and retire the right to develop their land. We derive a reduced-form bidding model that includes private and common values. This model allows us to estimate the role of bidder competition, winner’s curse correction, and the underlying distribution of private values. We estimate that the auction enrolled as many as 3,000 acres (12%) more than a take-it-or-leave-it offer would have enrolled for the same budgetary cost. (JEL Q24, Q28)