Journal
AMERICAN JOURNAL OF AGRICULTURAL ECONOMICS
Volume 98, Issue 3, Pages 785-801Publisher
OXFORD UNIV PRESS INC
DOI: 10.1093/ajae/aav064
Keywords
Minimum lot size program; farmland values; foreclosure auction data; regression discontinuity design; Taiwan; Q15; R52
Categories
Funding
- Ministry of Science and Technology in Taiwan [104-2410-H-002-004]
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This study empirically assesses the causal effect of the minimum lot size program on farmland values in Taiwan. A unique dataset of 4,032 parcels of farmland drawn from administrative foreclosure auction profiles between 2000 and 2008 and regression discontinuity design were applied to cope with the endogeneity issue of land use regulations. The results of the parametric and nonparametric estimations indicate that the minimum lot size program significantly increases farmland value by approximately 18% and 15%, respectively. Moreover, the program effect is more pronounced for farmland located in urban/suburban areas. In the absence of a tax effect and externality resulting from non-agricultural activities, the significant program effect on farmland values is likely to result from the effect of the program on farmland's option value for future development.
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