The Use of State Tax Incentives to Promote Forest Preservation on Private Lands in Tennessee: An Evaluation of Their Equity and Effectiveness Impacts

This study of Tennessee's tax incentive program for nonindnstrial forest preservation on private lands provides perhaps the most thorough empirical analysis available of this type of public program. First, the program's equity consequences are analyzed by examining both the concentration of land ownership and of subsidy benefits among program participants. Second, its effectiveness is evaluated by estimating the impact of the program under differing sets of assumptions about preferred selling prices and through a survey and comparison of a matched set of program participants and nonparticipants concerning their land use practices and attitudes. The study concludes with recommendations for tax policy reforms to create a better balance between public and private benefits, especially the expansion of program objectives to include biological diversity conservation and other non-commodity-based values.