Winter 2005 Vol. 14, No. 1

THE LIMITS OF ECONOMIC INCENTIVES

Initial results from a survey among non-industrial private landowners in Monroe County

By Marco A. Janssen, Research Scientist, Center for the study of Institutions, Population and Environmental Change, Indiana University;  Abigail M. York, Research Assistant, Center for the study of Institutions, Population and Environmental Change, Indiana University

BACKGROUND

We surveyed private landowners in Monroe County in order to better understand land use decision-making. Previous surveys in Monroe County pointed to the importance of aesthetic preferences in decision making, which has also been found in surveys throughout the United States. We are interested in how citizens make crucial decisions about the uses they will make of their own land, including participation in government programs. In the fall of 2003, we drew a random sample of landowners in Monroe County with properties of five acres or more. We sent out 783 surveys and received 290 (37%) surveys back. Our initial findings reported below indicate that aesthetics are important land use decisions, while economic considerations are less important for many landowners. A statistical analysis will be available later this year.

Table 1: The importance of various reasons to purchase

land as percentage of total number of responses

Very

Somewhat

Not

Number of

important (%) important (%) important (%)

responses

Residential purposes

86

8

5

251

Aesthetic enjoyment

77

16

7

231

Land investment

46

39

15

231

Recreation

44

36

20

230

Farming/agricultural uses

15

32

52

225

Timber production

5

25

70

220

 

REASONS FOR PURCHASE OF LAND

More than half of the respondents rated residential purposes and aesthetic enjoyment as very important. Land for farming and timber harvesting were considered not to be important by a majority of respondents. Recreation and land investment decisions were considered very or somewhat important by the majority of respondents. Approximately 50% of the land on the properties of the respondents in the study area is forested, according to our respondents. Ten percent of the land is farmed by crop production, 22% is mowed or hayed, and about 19% is grazed. Land use is not considered to be an important source of income. Mowing, haying, and growing forest is considered to be important for aesthetics for about half the respondents.

Table 2: Usefulness of various people or influences to land management decisions

by the private landowners as percentage of total number of responses

Very

Somewhat

Not

Never

Number of

useful (%)

useful (%)

useful (%)

used (%)

responses

Friends/family

24

48

11

18

276

Neighbors

20

44

14

23

278

Books

13

45

16

26

273

Governmental officials

(e.g., district forester)

13

29

13

45

272

Contracted individuals

(e.g., forester)

12

23

14

51

274

Internet

11

29

15

45

272

Tax accountants

9

19

21

51

275

Newsletters

7

42

20

31

274

Radio/TV/Newspaper

7

35

24

33

275

Sales representative

1

8

25

66

275

SOURCES OF INFORMATION FOR MAKING LAND MANAGEMENT DECISIONS

Similar to earlier studies in the USA, family and friends are the main source of information, followed by neighbors. Books and governmental officials are also considered useful resources for information. Tax accountants and sales representatives are not considered to be valuable sources of information for land-use decision making.

GOVERNMENTAL AND NONGOVERNMENTAL PROGRAMS

The majority of landowners do not participate in governmental or nongovernmental land management programs. Many landowners are unfamiliar with the programs or perceive the programs to be too restrictive or not useful. programs, 89 (31%) said yes, and 193 (67%) said no. Of those respondents who are familiar with classified land programs, 25 (28%) said that they are enrolled in at least one of the programs, while 63 (71%) respondents are not enrolled. The main reason why those familiar with classified land programs do not enroll is that they do not want to have restrictions on the use of their properties (57%).

Nineteen respondents participate in the Classified Forest Program, five in a wildlife habitat program, one in a riparian program, one in a windbreak program, and two in a filter strip program. Reduction of the property tax and environmental benefits were considered to be the most important reasons for participants to join a classified land program (68% and 60% of respondents, respectively). It appears that landowners whose families have lived in southern Indiana for several generations are somewhat less eager to participate in a classified land program, while other factors such as education level, religion, property size, and income have no statistical significant relationship with participation.

Only 10% of respondents had participated in a federal cost-share program. Of those who participated in a federal cost-share program, 17 (59%) used the Conservation Reserve Program, 10 used the Forestry Incentives Program, four used the Stewardship Incentive Program, three used the Wildlife Habitat Incentive Program, and two used the Wetland Reserve Program. Twenty-one percent of respondents were familiar with conservation easements, but only 6% of those respondents had a conservation easement on their property. Landowners without conservation easements, and familiar with such easements, indicated that they did not have one because they do not want restrictions on their properties (67%).

Table 3: Reasons why trees were harvested or

cut as percentage of total number of responses

Very

Somewhat

Not

Number of

important (%) important (%) important (%)

responses

To remove trees damaged

by a natural catastrophe

55

21

24

100

To improve the quality

of remaining trees

51

26

24

97

Trees were mature

34

17

50

91

Needed wood for my own use

31

23

46

90

Achieve objectives in

management plan

30

22

48

90

To clear land for

conversion to another use

26

18

57

90

To improve scenic and

recreational opportunities

16

28

57

90

To improve wildlife habitat

15

31

54

91

The price was right

12

13

76

87

Needed the money

8

14

79

89

To improve hunting opportunities

2

10

87

87

 

TREE HARVESTING

Respondents were asked about tree harvesting on their property. Thirty-six percent had cut trees in the past five years. Of those who had cut trees. 32% cut sawlogs for commercial sale, 22% cut sawlogs for personal use, and 66% cut firewood for personal use. Only 8% of respondents who had harvested trees indicated that the income from harvesting was very important relative to their total income, and 14% said that income from harvesting was somewhat important.

In comparison, the majority of respondents indicated that they had cut trees due to natural catastrophe, to improve the forestís quality, to supply wood for their own use, to remove mature trees, or to achieve objectives in their management plan. Other respondents indicated that they had cleared land for conversion to another use, for needed money, or because the price quoted to them for the timber was very or somewhat important in their decision to harvest. For the majority of respondents, the decision to harvest is not a direct result of economic factors, such as price or need for additional income, but rather is based on a longer time horizon and a goal to improve the quality of the forest by clearing out damage after tornados or ice storms and cutting mature trees. Furthermore, many decisions to cut are based on personal need for firewood, not for income from sale of timber. Professional foresters or natural resource professionals assisted in about 21% of the harvests.

TREE PLANTING

About half of the respondents planted trees during the past five years. These plantings may refer to planting trees in a yard or to planting large numbers of trees in open fields. Of the 130 respondents who planted trees, three took advantage of the Reforestation Tax Credit and Amortization provisions. Notably, the majority of respondents who had planted trees were unaware of the tax credit and amortization programs. We asked about the reasons why respondents planted trees. Their responses show that they are mainly concerned with aesthetics and nature conservation. Economic incentives or advice from professionals are not considered to have significant impacts.

Table 4: The reasons why trees were planted as

percentage of total number of responses

Very

Somewhat

Not

Number of

Reason

important (%) important (%) important (%)

responses

Enhance scenic beauty

81

13

6

119

Conserve natural environment

57

20

22

103

Food and habitat for wildlife

50

21

29

117

Provide forest for future generations

42

23

34

99

Improve water quality by

controlling erosion

32

28

40

103

Windbreak

26

28

47

105

Low-cost seedlings from state

20

14

66

100

Timber production

6

9

85

94

Advice from professional forester

4

5

91

99

Cost-share program

4

0

96

98

Advice from county educators

3

2

95

98

Revenue from timber sale to

finance reforestation

3

1

96

97

Tax benefits

0

1

99

95

 

CONCLUSION

In designing governmental and nongovernmental programs that are aimed to stimulate particular management practices of forested areas on private land it is important to understand the motivations of the landowners. Responses from a sample of private landowners in Monroe County show that the current population is not motivated to change their land primarily as a result of economic incentives. They prefer a particular environment in which to live. The management of their property is highly affected by these motivations. Future programs may focus more on aesthetics and nature conservation and less on economic incentives to make the programs more effective with the current population of non industrial private land owners.

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