Propensity Score Valuation

        "Extensive energy development in Sublette County, Wyoming has prompted land management agencies to undertake compensatory (off-site) mitigation projects aimed at offsetting adversely impacted wildlife species, particularly mule deer (Odocoileus hemionus), pronghorn antelope (Antilocapra americana), and Greater sage grouse  Centrocercus urophasianus). Agencies have used conservation easements, or purchases of development rights, as a tool for protecting wildlife habitat on private agricultural lands. To most effectively mitigate impacts to wildlife from energy development and from expanding rural residential development, decision-makers must protect lands that offer the most biological value at the least cost. Given increasing demand for rural, amenity-rich residential properties in Sublette County, I define the economic value of agricultural lands as the sum of a given parcel’s productive value in agriculture and its value in residential development.
 
        I use propensity score matching to estimate the unobservable future residential value of parcels currently in agricultural use and hence, assess each parcel’s economic value. I impute the median value of residential parcels to their matched agricultural counterparts to calculate an economic score. Similarly, I calculate a biological score for each parcel based on the parcel’s acreage of and proximity to critical wildlife habitat. Combined, the economic and biological scores form a production possibilities frontier that represents economically efficient arrangements of parcels in either agricultural or residential use across the landscape of Sublette County. I identify  optimal conservation easement purchases according to four different policy approaches and compare the current Sublette County landscape to my results.
       
        My results indicate that while the economic efficiency of conservation easement purchases can be improved, opportunities to protect critical biological values are limited by a lack of key habitat on private agricultural lands. Further, I find that substantial biological values, including those on already protected lands, are likely to continue in the absence of conservation easements given my estimate of observing each parcel in a residential rather than agricultural use. This suggests that resource managers should carefully target conservation easement purchases based on parcels’ risk of development in addition to increasing efforts to carry out onsite mitigation on public lands."