The Impact of Recreational Homes on Agricultural Land Use

When nonresidents purchase ag-ricultural properties, the land use decision can make farmland operate below potential, still allowing for tax credits. We empirically investigate how nonresident ownership af-fects the agricultural land use decisions in upstate New York. A difference-in-difference matching approach shows a causal link be-tween purchases by nonresidents and a loss of 11% of acreage to a lower -productivity use. A generalization shows this conversion counts for one-seventh of the decreased agricultural land in intensive uses in similar counties. Perhaps a simple opportunistic use of the tax -credit criteria, this phenomenon contradicts the policy's objective and might impose other consequences on rural communities. (JEL R14, Q15)