Does the minimum lot size program affect farmland values? Empirical evidence using administrative data and regression discontinuity design in Taiwan
Journal
American Journal of Agricultural Economics
Journal Volume
98
Journal Issue
3
Pages
785-801
Date Issued
2016
Author(s)
Lin, T.-C.
Abstract
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. © 2015 The Author 2015. Published by Oxford University Press on behalf of the Agricultural and Applied Economics Association.
Subjects
farmland values; foreclosure auction data; Minimum lot size program; regression discontinuity design; Taiwan
SDGs
Other Subjects
agricultural economics; agricultural land; design; empirical analysis; land management; regression analysis; Taiwan
Type
journal article