State-Level Variation in Land-Trust Abundance: Could It Make Economic Sense

Few economic analyses examine land trusts, their decisions, and the land-trust "industry," despite their growing importance. For example, statistics on the wide variation in the number of trusts in different regions of the United States raise questions about whether such variation makes economic sense. This paper builds a model to identify the optimal number of private conservation agents. The model depicts two competing forces: regional spatial externalities in conservation benefits that increase the efficiency of having fewer agents and organizational costs, and fund-raising specialization, which increases the efficiency of having more agents. Using state-level variables, we perform a count-data analysis of the number of trusts conserving land in each state. We find that the number of trusts actually observed is consistent with the optimal number of trusts that is predicted by the model on the basis of the relative importance of spatial externalities and organizational size in different regions.