ECONOMIC LAND EVALUATION - WHY AND HOW

Economic land evaluation is a method for predicting the micro-economic value of implementing a given land-use system on a given land area. T his is a more useful prediction of land performance than a purely phys ical evaluation, since many land-use decisions are made on the basis o f economic value. Measures of economic suitability include the gross m argin, net present value, internal rate of return, benefit:cost ratio, and utility functions based on these. The economic value of the in-si tu resource quality of a land area may be inferred directly from land characteristics or from Land Qualities which, when less than optimum, result in decreased yields or increased costs. The economic value of g eographic land characteristics may be determined by spatial analysis. Single or multi-criteria economic optimization and risk analysis can e xtend the economic land evaluation from a natural resource or manageme nt unit to a production or planning unit. Computerized tools may be us ed to assist in economic land evaluation.