The Effect of Checkerboard Land Ownership Pattern on Land Markets

Abstract

In this thesis I examine the effect of a constraint on land configurations using two different property rights regimes- checkerboard and non-checkerboard lands- on land markets. The checkerboard land ownership pattern refers to alternating section pattern of public and private lands created by the railroad land grants of the late nineteenth century. Given the rectangular survey (RS) grid of the United States, each 640 acres (1 square mile) section of private land inside checkerboard in surrounded by public land on all four sides. Similarly, every section of public land inside the checkerboard is surrounded by private land on all four sides. I develop an economic framework for conducting comparative analysis of private lands inside and outside the checkerboard. I begin by considering how a private landowner inside the checkerboard achieves optimal acreage compared to a private landowner outside the checkerboard. I develop five measures of “checkerboardedness” to account for depth and extent of the checkerboard. My primary hypothesis is that areas with higher values of checkerboard measures have lower land values per acre and create fewer incentives for landowners to invest in the land. My empirical analysis focuses on Douglas County, Oregon where private lands are present in and outside the checkerboard. Checkerboard lands in the area were a result of Oregon and California Railroad land grant of 1866. I use Douglas County Tax Assessor data for year 2013 to compare land values for land sections inside and outside the checkerboard. A section as defined by the rectangular survey of the United States is the unit of observation. The empirical estimates indicate that checkerboard lands have lower land values per acre and lower private roads density compared non-checkerboard lands, all else equal.