Public lands and urban quality of life

Abstract Federal and state‐owned public lands occupy a significant proportion of many U.S. urban regions, contributing to two highly‐valued, nontradable goods: viewscapes and outdoor recreational opportunities. Yet, public lands have not been adequately addressed in the urban quality‐of‐life (QOL) literature. We argue that much of the previous literature has (1) used a geographic level of aggregation that has not been extensive enough to capture all the public lands that influence wage and housing equilibria, (2) often defined public lands measures too narrowly and has excluded over 50% of public land influencing hedonic equilibria, and (3) has rarely attempted to control for public lands endogeneity when quasi‐experimental approaches are infeasible. Using GIS and Census data for U.S. urban areas, along with instruments rooted in the 19th century land disposal policies, we estimate how publicly owned federal and state lands contribute to urban QOL. Our preferred specifications are based on Bureau of Census defined Combined Statistical Areas that are linear in public land variables, and the results are robust regardless of geographic aggregation and model specification. Welfare calculations indicate that the annual urban household willingness‐to‐pay estimate for a one percent increase in public land ranges between $80.58 and $130.29. Our study contributes to the literature by establishing land grant railroads as an exogenous instrument for public lands and by providing a framework for evaluating the welfare consequences of proposed land exchanges and other changes in land ownership or management.