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Land trusts are nonprofit organizations that conserve environmental amenities on private land. Trusts can conserve land by owning it outright or holding conservation easements. This article describes the economic tradeoffs of these two conservation methods. Relative to full ownership by a land trust, conservation easements generate higher transaction costs. The trust and landowner will exert time and money to specify, monitor, and enforce the terms of the easement throughout its duration. Conservation easements, however, facilitate more economical production of commodities such as crops and beef because a separate landowner generally has a specialization advantage in managing agricultural land. Data from the Land Trust Alliance show that trusts tend to hold easements when transaction costs are low and gains from landowner specialization are high. For example, most trusts use easements to preserve scenic views over large parcels of agricultural land and use full ownership to enhance ecological functions on non-agricultural land. The desire to help donors of land and easements capitalize on tax benefits, however, sometimes outweighs transaction cost and specialization considerations and can militate against the use of cost-reducing conservation methods. [ABSTRACT FROM AUTHOR]