By Holly Fretwell and Shawn Regan

There is a great divide in the United States. Land in the East is mostly privately owned, while nearly half of the land in the West is owned by the federal government. In recent years, several western states have passed, introduced, or considered resolutions demanding that the federal government transfer much of this land to state ownership. These efforts are motivated by local concerns over federal land management, including restrictions on natural resource development, poor land stewardship, limitations on access, and low financial returns.

The resolutions reflect a sentiment in many western states that state control will result in better public land management. To date, however, there has been little research comparing the costs of state and federal land management. Most existing studies assume that the costs of federal land management would be the same under state management and do not consider the different management goads, regulatory requirements, and incentive structures that govern state and federal lands.

Te purpose of this report is to compare state and federal land management in the West. In particular, we examine the revenues and expenditures associated with federal land management and compare them with state trust land management in four western states: Montana, Idaho, New Mexico, and Arizona. These states, which encompass a wide range of landscapes, natural resources, and land management agencies, allow for a robust comparison. Our analysis will help explain why revenues and expenditures may differ between state and federal land agencies and explore some of the implications of transferring federal lands to the states.

We find that state trust agencies produce far greater financial returns from land management than federal land agencies. In fact, the federal government often loses money managing valuable natural resources. States, on the other hand, consistently generate significant amounts of revenue from state trust lands. On average, states earn more revenue per dollar spent than the federal government for each of the natural resources we examine, including timber, grazing, minerals, and recreation.

Full report available here.

  Holly Fretwell

Holly Fretwell is a Research Fellow at PERC and an adjunct instructor at Montana State University where she has taught introductory economics, macroeconomics, natural resources, and environmental economics. She works with the Foundation for Teaching Economics, giving workshops for high school teachers to improve their skills in teaching and using economic tools. Fretwell has co-authored curriculum for high school teachers on economic principles and climate change issues. She is author of the new book Who is minding the Federal Estate: Political Management of America's Public Lands. She has presented papers promoting the use of markets in public land management and has provided Congressional testimony of the state of U.S. National Parks  and the future of the Forest Service. She has also published a children's book on climate change, The Sky's Not Falling: Why It's OK to Chill About Global Warming (Wold Ahead Publishing, 2007), that encourages parents, teachers, and kids to become critical thinkers. Fretwell holds a bachelor's degree in political science and a master's degree in resource economics from Montana State University.

Other articles by Holly Fretwell can be found here.

 Shawn Regan

Shawn Regan is the Director of Publications and a Research Fellow at PERC. He holds a M.S. in Applied Economics from Montana STate University and degrees in economics and environmental science from Berry College. His work has appeared in the Wall Street Journal, Quartz, High County News, Reason, Regulation, Grist, and Distinctly Montana. Shawn is a former backcountry ranger for the National Park Service. He lives with his wife in Bozeman, Montana. Shawn can be reached at [email protected]; Twitter: @Shawn_Regan.

Other articles by Shawn Regan can be found here.

This article was originally published on perc.org on February 5, 2015.