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ABSTRACT:Policies that improve drought resilience have heterogeneous effects on agricultural land values. We examine the value of surface water transfers and groundwater resources in a hedonic analysis of agricultural parcels in California. We find that parcels in irrigation districts, which engage in interbasin surface water transfers, experience an increase in value in subsequent years, but the gains are short-lived and unevenly distributed. Value of groundwater stock is higher in parcels outside irrigation districts. We also find that policies to restrict groundwater-substitution-based transfers, which aimed to reduce groundwater open-access externalities, have not been a deterrent against transfers in all areas.

ABSTRACT:We discuss data quality and modeling issues inherent in the use of nationwide property data to value environmental amenities. By example of Zillow’s Transaction and Assessment Database, a real estate database covering the United States, we identify challenges and propose guidance for (1) identifying arm’s-length sales; (2) geolocating parcels and buildings; (3) identifying temporal links between transaction, assessor, and parcel data; (4) identifying property types, such as single-family homes and vacant lands; and (5) dealing with missing or mismeasured data for standard housing attributes. We review current practice and show that how researchers address these issues can meaningfully influence research findings.