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We examine the impact of the National Ambient Air Quality Standards,
as defined by the Clean Air Act, on agricultural land values within
the corn and soybean regions of the United States. To achieve this objective,
agricultural census data on farmland values are combined with
pollution exposure metrics as defined by the Environmental Protection
Agency. Using a difference-in-differences approach and conducting various
robustness checks, we find that compliance with air quality standards
has a statistically significant negative effect on agricultural land values
at the county level. Moreover, evidence from quantile regression analysis
suggests that counties in the lower quantiles fail to translate the economic
and environmental benefits of pollution reduction into increased farmland
values, unlike their counterparts with the highest-valued lands.
