EXTERNALITIES FROM ROAMING LIVESTOCK - EXPLAINING THE DEMISE OF THE OPEN RANGE

Fence-in laws in most states require ranchers to pay for fences to kee p their livestock. from trespassing onto others' property. Some states , or jurisdictions within states, have a fence-out rule that requires ranchers' neighbors to pay for fences to keep livestock out. Both rule s are Pareto optimal. Using a potential Pareto criterion, we show that a preference for fence-out in some areas may end as conditions change , such as increased nonranching land uses. Changed conditions may have legal consequences. Specific fence-out and fence cost-sharing provisi ons may be potentially Pareto inefficient and may be challenged for be ing unconstitutional under the due process clause.