Hotelling's Theory, Enhancement, and the Taking of the Redwood National Park

Abstract

Abstract The United States has used its power of eminent domain to take a considerable fraction of all remaining old‐growth redwood for inclusion in the Redwood National Park. Hotelling's theory implies that the price of redwood remaining in private hands should have increased. In this paper we provide an estimate of how much the taking increased the price of redwood as well as a test of the underlying Hotelling theory.