Stranded : The Effects of Inaccessible Public Land on Local Economies in the American West

This paper analyzes the effect of public land on local economies in the western United States. In large part, the current distribution of western public lands is the result of federal land disposal policies of the 19th century. This historical context is important for two reasons. First, it implies that public lands are unlikely to be an exogenous determinant of current local economic indicators. In contrast to most of the earlier literature, we address the endogeneity of public land measures using instruments derived from historical data on federal land grants. Second, the land disposal policies created a mosaic of land ownership that can limit access to public lands. We use GIS data on land ownership and road networks to quantify the amount of “stranded” inaccessible public-access land in over 400 counties across the western United States. Similar to previous studies, we find that accessible public land has a statistically significant but economically small negative impact on county farmland values in 2017. However, the effect of stranded, inaccessible public land is much larger and significant: a 10 percent (0.07 percentage point) increase in stranded land in a county leads to an approximate 3% county-wide reduction in land value. Our results show that access is crucial to understanding the mechanisms through which public land affects local economies