Over-Perception about Land Use Changes: Assessing Empirical Evidence and Linkage with Decisions and Motivated Beliefs

Perception biases documented in the literature often pertain to subject matters that are difficult to observe or measure, such as one???s ability. We study perception biases with respect to a concrete indicator that can be objectively measured: land use changes in a local area. We examine four hypotheses about land use change perceptions and test them with farm survey data complemented by satellite data. We discover systematic biases in farmers??? perceptions about local land use changes that are consistent with motivated beliefs and evidence that links perceptions with intended future land conversions. Alternative explanations and policy implications are discussed. (JEL Q15, Q24)