Land taxation and agricultural land use: evidence from the English Fenlands

This paper examines how recurring land taxation affects agricultural land use and ownership by leveraging a natural experiment in the English Fenlands. The region’s hydrological landscape is divided into Internal Drainage Districts (IDDs), each charging different drainage rates determined by natural geographic features unrelated to agricultural productivity. Exploiting this quasi-random variation, we implement a geographic regression discontinuity design to identify the causal effects of higher land charges on land ownership and production decisions. We find that higher drainage rates lead to significant changes in ownership structure, with land shifting away from private owners and toward local authorities. Higher-tax areas also exhibit greater use of high-input, high-return crops such as potatoes, alongside higher vegetation intensity measured using remote sensing indicators. These findings suggest that recurring land charges can influence both the organization of agricultural land and production incentives, highlighting the broader role of land taxation in shaping rural land use.