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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. This is a more useful prediction of land performance than a purely physical evaluation, since many land-use decisions are made on the basis of economic value. Measures of economic suitability include the gross margin, net present value, internal rate of return, benefit :cost ratio, and utility functions based on these. The economic value of the in-situ 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 geographic land characteristics may be determined by spatial analysis. Single or multi-criteria economic optimization and risk analysis can extend the economic land evaluation from a natural resource or management unit to a production or planning unit. Computerized tools may be used to assist in economic land evaluation.