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Abstract
A theory-based participation model is developed
using the assumptions of perfect capital
markets and perfect information. Given this specification
it is shown that participation in a
PDR program is always equivalent in present value
terms to selling the land, and is always at least
as good as not participating and remaining in
farming.
In order to investigate participation rates
in the Maryland PDR program a less restrictive
model is developed which relaxes the perfect capital
markets assumption. It is found that a PDR
program is most likely to be successful in regions
characterized by relatively low levels of
development pressure, and least likely to be successful
in areas experiencing high rates of
growth or areas that are not undergoing development
pressure.