@article{Cho:177182,
      recid = {177182},
      author = {Cho, Seong-Hoon and Kim, Taeyoung and Larson, Eric R. and  Armsworth, Paul R.},
      title = {Economies of Scale in Costs of Land Acquisition for Nature  Conservation},
      address = {2014-07},
      number = {329-2016-12961},
      pages = {50},
      year = {2014},
      abstract = {Market failure results in more human conversion of  ecosystems for development and other uses than likely  socially desirable. In response, many government agencies  and nonprofits focus on conservation, often acquiring land  rights to establish protected areas on which further  conversion of ecosystems is precluded. The protected areas  created vary greatly in size, even within a particular  conservation program. Here we examine the costs that  conservation organizations face when acquiring sites for  protection and pay particular attention to the consequences  of this variability in protected area size. We use as our  case study parcels in Central and Southern Appalachian  forest ecosystems that were protected through fee simple  acquisition and using easements by The Nature Conservancy,  a nonprofit land trust. We compare these sites to  unprotected areas similar to the protected areas in terms  of site characteristics as identified by post-hoc matching  methods. When comparing average costs, we found parcels  protected under by fee simple transactions cost less than  matched unprotected parcels, and that average costs of  protecting parcels using easements were lower still. We  also found that acquisition costs of protected areas  achieve economies of scale under fee simple transactions.  However, these economies of scale were often weaker than  those present when considering matched, unprotected  parcels. Parcels protected by easements did not show  economies of scale with area. We were able to identify a  subset of transactions where the agreed price was reduced  to reflect an explicit donative intent on the part of the  seller. For this subset of transactions, we found that the  presence of donative intent disrupted any kind of  systematic relationship between lot size and acquisition  costs for conservation. Our findings imply that to achieve  cost effective conservation,
conservation organizations  will need to strategize with respect to parcel size and  contract type. For example, when acquiring parcels under a  fee simple transaction, economies of scale in acquisition  costs provide an incentive for conservation organizations  to favor larger parcels, reinforcing ecological arguments  that favor protecting larger protected areas. Also, by  quantifying the cost differential between fee simple and  easement acquisitions, we provide a benchmark for  evaluating how much greater the ecological benefits of fee  simple acquisition would have to be to provide the most  effective option for conservation.},
      url = {http://ageconsearch.umn.edu/record/177182},
      doi = {https://doi.org/10.22004/ag.econ.177182},
}