Forested Farmland and Biofuel Production: Combining Spatial and Economic Data to Estimate the Impact of Land Use-Values on Forestation Rates

State and national policies driving ethanol production in Pennsylvania and elsewhere in the United States have elevated corn prices and subsequently the amount of land devoted to growing corn. There are concerns this may have a negative impact on water quality and other ecosystem services, especially if land is converted from forest to corn production. Pennsylvania has experienced a net increase in forested farmland in recent years, but higher corn prices may slow down or reverse such a pattern. The overall benefit from expanding ethanol production has to take into account land‐use changes that decrease forested land and therefore bear a cost of foregone carbon sequestration and water quality benefits. This paper utilizes land cover and soil maps to create spatially explicit variables to examine the pattern of forestation in a heavily corn producing region of Pennsylvania using multinomial logistic regression. Results are mainly consistent with expectations that land with the highest rents from corn production are least likely to become forested over the period, indicating that the framework developed has potential for further analyses pertaining to agricultural land‐use