Do Landowners Respond to Land Retirement Incentives? Evidence from the Conservation Reserve Enhancement Program

Previous research on incentive responsivness in voluntary land retirement programs has utilized either hypothetical contingent response methods or actual aggregate enrollment data, both of which suffer from potential biases. In this paper, we analyze program participation in the binary-choice setting of the Conservation Reserve Enhancement Program (CREP) using data from six states. Our results suggest that landowners react positively to the incentives that are offered and that increases in onetime incentives, offered at the time of signup, are a more cost-effective means to increase enrollment than increases in the incentives offered on an annual basis. (JEL Q15, Q24)