What Drives Land Use Change in the Southern U.S.? A Case Study of Alabama

Land use change reflects fundamental transformations in society. To better understand factors contributing to current land use changes in Alabama, we expand on existing land use studies by employing a generalized least-square method nested in a system of equations for the analysis. We correct for endogeneity issues in our paper by incorporating a control function technique. Using repeated land use data from 1990–2018, we focus on analyzing factors affecting land use changes among timberland, agricultural, urban, and conservation land use types. Our results reveal that land quality factors influence land allocation and land use decisions. We also indicate that population density is a driver for replacing timberland for urban development and agricultural purposes. We show that interest rates are important factors in timberland use decisions as timberland investments are sensitive to capital cost. We provide a basis for future simulations of nationwide land use changes under different economic and policy scenarios, as we offer new insights and contribute to the existing knowledge into public policies that are related to land use planning and management.