Success Through the Selection and Design of Local Referenda H

The Conservation Movement: Success Through the Selection and Design of Local Referenda H. Spencer Banzhaf, Wallace E. Oates, and James Sanchirico © 2007 Lincoln Institute of Land Policy Lincoln Institute of Land Policy Working Paper The findings and conclusions of this paper are not subject to detailed review and do not necessarily reflect the official views and policies of the Lincoln Institute of Land Policy. Please do not photocopy without permission of the Institute. Contact the Institute directly with all questions or requests for permission. [email protected] Lincoln Institute Product Code: WP07SB1 Abstract The American electorate demands more conservation. From 1998 to 2006 there were over 1,550 state, county, or municipality ballot measures targeting open-space, wetlands, and forest conservation, of which almost 80% were successful. We analyze which local jurisdictions are most likely to place land-preservation initiatives on the ballot, as a function of local demographics, land uses, and political factors. In addition, we analyze the outcomes of these initiatives, again as a function of these factors as well as initiative- specific details such as financing mechanisms. Our model controls for the selective nature of the sample, both in terms of which communities hold referenda and in terms of which types of referenda they vote on. To do so, we employ a polychotomous sample selection estimator not previously used in this literature. We find that more educated communities, with fewer children, and voting democratic in presidential elections are more likely to hold and/or vote in favor of open space referenda. We also find that communities are more likely to support referenda financed with bonds, even after controlling for the self-selection of financial mechanisms. Additionally, we find that referenda are more likely to occur in ecologically sensitive areas, though, once on the ballot, there is no evidence that referenda in these areas are more likely to pass. Finally, we find that referenda are indeed occurring in communities where they are most likely to be successful. Taken together, these latter two findings suggest that land trusts as a group, whether by design or by some “invisible hand,” are pursuing a successful strategy to protect ecosystem services. About the Authors Spencer Banzhaf is an associate professor in the Dept. of Economics, Andrew Young School of Public Policy, Georgia State University. He is a David Lincoln fellow at the Lincoln Institute of Land Policy and a Julian Simon fellow at the Property and Environment Research Center. He received his BA and his PhD in economics from Duke University. His research interests include valuation of environmental amenities, "environmental gentrification," and land taxation. Wallace Oates is a professor of economics at the University of Maryland and University Fellow at Resources for the Future. He received his Ph.D. from Stanford University and has taught at Princeton University. He has served as President of the Eastern Economic Association (1989-90) and the Southern Economic Association (1994-95). Currently his research efforts address the international dimensions of environmental policy and issues concerning fiscal decentralization in both industrialized and developing countries. James Sanchirico is an associate professor in the department of Environmental Science and Policy, University of California at Davis. He received his BA from Boston University and his PhD in agricultural and resource economics from UC-Davis. His research focuses on the economic analysis of marine policies, especially the effects of individual transferable quotas and marine protected areas. His other research interests include spatial and intertemporal management of biological resources, the interface between land use and biodiversity conservation, and the economics of invasive species management. Sanchirico has served as an associate editor of Marine Resource Economics. Contact information: H. Spencer Banzhaf James Sanchirico Associate Professor Associate Professor Department of Economics Dept. of Environmental Science and Policy Andrew Young School of Policy Studies 2140 Wickson Hall PO Box 3992 University of California, Davis Georgia State University One Shields Avenue Atlanta, GA 30302 Davis, CA 95616 404-651-6981 530-754-9883 [email protected] [email protected] Wallace E. Oates Professor Department of Economics University of Maryland College Park, MD 20742 301-405-3496 [email protected] Table of Contents Introduction 1 Discussion of Research Questions and Previous Research 3 Empirical Strategy 6 Data 8 Land Vote Data 8 Demographic and Land Use Data 9 Election Data 10 Fiscal Context 10 Results 11 Propensity of Communities to Hold Referenda: Selection Equation 11 Success of the Referenda: Outcome Equation 12 Conclusions 15 Works Cited 17 Figures 19 Tables 21 The Conservation Movement: Success Through the Selection and Design of Local Referenda* You know, if one person, just one person [walks in and sings 'Alice's Restaurant'] they may think he's really sick and they won't take him…. And if three people do it, three, can you imagine, … [t]hey may think it's an organization. And can you, can you imagine fifty people a day, I said fifty people a day walking in singing a bar of 'Alice's Restaurant' and walking out. And friends they may thinks it's a movement.... —Arlo Guthrie I. Introduction From 1998 to 2006, 1550 referenda for the conservation of open space appeared on state, county, and municipal ballots across the United States. Of these, nearly 80 percent passed. By the standards of Arlo Guthrie’s “Alice’s Restaurant Massacree,” we are witnessing a movement. The movement is widespread and encompasses every level of government and over 40 states. And it continues apace, with 134 measures totaling over $29 billion passing in 2006. As noted by Nelson et al. (2006), expenditures authorized through these referenda outpace the Conservation Reserve Program by about 50 percent. These referenda address a variety of conservation objectives, including the preservation of agricultural lands; the preservation of ecologically valuable wetlands, meadows, and woodlands; and the creation of new recreational areas. Moreover, the sources of these referenda are quite diverse: some stem from popular support at grass-roots levels and others are top-down initiatives introduced by elected officials. Upon first glance, the support these measures receive at the ballot box is striking. Not only do the vast majority of referenda pass, most do so by a wide margin. Although most only require a simple majority for passage, the median measure receives approximately 60 percent of the vote. What does this support reveal about the electorate’s preferences for open space? Which communities support open space protection at the ballot box, and what characteristics of referenda (e.g. bond vs. tax financing) are most appealing to voters? In this paper, we address these questions using the "Land Vote" data set collected by the Land Trust Alliance and the Trust for Public Lands. Our data set comprises all known US open space referenda from 1998 to 2006, and includes information on the financing mechanism, specific designations for funds (e.g. parks and recreation trails vs. farmland), the level of funds to be authorized, and the vote outcome. We match the “Land Vote” data to US census attributes of the community, county-level land use and agricultural data, data on the presence of endangered species, and political variables. * We thank Allan Mazur, Phyllis Myers, Stephen Polasky, Jeffrey Sundberg, and especially David Simpson and Randall Walsh for comments and suggestions. We are grateful to Kenny Gillingham, Robin Goldman, Erik Johnson, Sarah Beth Link, and Daniel Schwab for excellent research assistance. Last but not least, we thank the Lincoln Institute of Land Policy for generous financial support. 1 These additional variables enable us to test hypotheses about which communities are protecting open space. A second set of questions surrounds the extent to which we can extrapolate the results from the jurisdictions with a referendum to other communities that have not had one. Does the past success of the referenda held to date imply that referenda in other communities would experience similar success? Can we infer that because bond- financed referenda have fared better than tax-financed referenda that the same pattern is to be expected in the future? To make such inferences is to assume implicitly that referenda occur in a random sample of communities and, likewise, that the financing mechanism is randomly selected. But in fact, these decisions are the result of careful planning. Environmental organizations are likely to target the most promising jurisdictions for conservation referenda. Some, like The Conservation Fund and The Trust for Public Land, have even published manuals that provide detailed guidance on “the how and where” of designing and introducing conservation referenda (Hopper and Cook 2004, McQueen and McMahon 2003). Under such circumstances, communities that hold referenda—and indeed referenda of a particular type—may differ systematically from other communities. Accordingly, we cannot simply take the results from the referenda in our sample as being representative of attitudes or preferences for the country as a whole. The potential for selection bias is too great. We use a generalized Heckman approach to control for selection bias. Following Dubin and McFadden (1984), we employ a multinomial

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