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Abstract This article conceptualizes the effects of suburban population density and land speculation on agricultural production choices, prices, and profits. A dual profit function model and a system of reduced‐form price equations are used to estimate these effects for New Jersey. Results show that vegetable production is the only subsector to benefit from suburbanization, while livestock is the most adversely affected. Suburbanization reduces responsiveness to agricultural prices and discourages capital and land use. The overall impact on profits is positive when capital gains on land are included. Policy implications for farmland preservation and “right to farm” legislation are discussed.
López et al. (Sun,) studied this question.