Eric A. DeVuyst, Associate Professor
and Cheryl S. DeVuyst, Associate Professor
Department of Agribusiness and Applied Economics, North Dakota State University
|Cattle and geese feeding on crop aftermath at CGREC, fall 2007.|
Anecdotes commonly relate that the demand for recreational land is pricing locals out of land markets. We frequently hear stories about hunters from outside an area paying “outrageous” amounts for marginal farm land. Our goal is to measure the impact that hunting pressure has on average pasture land values in North Dakota.
Our analysis employs a panel data estimation procedure to account for differences in land values between counties (called a fixed effect) and across time. Using published data on average county land values (USDA National Agricultural Statistics Service) and unpublished data on hunting license sales (ND Game and Fish), we model pasture land values as a function of hunting license sales, past land values, beef prices, and interest rates. Data cover 1989-2006. During that period, total hunting license sales increased from 98,544 to 196,075, suggesting a significant increase in recreational demand.
Results indicate that a $1 increase in beef price causes a $0.24 per acre net increase in average pasture land values over a two-year period. A 1% increase in the prime rate reduces pasture land value by $2.54 per acre. Hunters are found to have a very small marginal impact on land values. Each additional 1000 hunters increases pasture land value by $0.11 per acre. In aggregate, however, the total impact averages $16.27 per acre over the 18-year study period. In 2006, the aggregate impact of hunters was $21.67 per acre.
The hypothesized effect of hunters on land values is supported. However, the effect is relatively small. While our study finds that hunters have a small impact on average land values by county, they can have very large impacts on specific land sales.