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Abstract
A spatial economic model is developed to guide regulatory policy for wetland compensation under wetland mitigation banking in Minnesota. A binary integer-integer programming model identifies restoration sites based on their potential for environmental quality improvement. In contrast to results found in the application of reserve site selection for species preservation (Ando et al, 1998, Polasky et al, 2001), the unique homogeneity of wetland restoration sites in Minnesota and the inclusion of restoration costs that exhibit economies of scale suggest that the private market may function adequately to create large, high quality habitats for wetland restoration.