Abstract: A Relationship of Trust: Are State ?School Trust Lands? Being Prudently Managed for the Beneficiary?

Volume 26, Number 4, 2004 of the Journal of Real Estate Research

A Relationship of Trust: Are State ?School Trust Lands? Being Prudently Managed for the Beneficiary?

Mark A. Sunderman
Professor of Finance
University of Wyoming
Department of Economics and Finance
P.O. Box 3985
Laramie, WY 82071-3985
Phone: (307) 766-4199
Office fax: (307) 766-5090
sundermn@uwyo.edu

Ronald W. Spahr
National City Bank Distinguished Professor of Banking and Finance
College of Business and Management
University of Illinois at Springfield
One University Plaza, MS CBM 109
Springfield, IL 62703-5407
Office phone: (217) 206-6858
Office fax: (217) 206-7543
spahr.ronald@uis.edu

Samuel Runyan
Graduate Student
University of Wyoming
Department of Economics and Finance
P.O. Box 3985
Laramie, WY 82071-3985
sam.runyan@agedwards.com

Abstract: Every state entering the Union in the United States since 1803 received land grants from the federal government for the support of their public schools. Inherent in this federal grant is the
fiduciary duty to prudently and effectively manage trust assets for the beneficiary, their school systems. This paper addresses the question of whether managers of trust lands are meeting their
fiduciary responsibilities of ??maximum economic benefit?? for their beneficiaries. Realized market value-based economic returns from grazing lease revenues and capital appreciation for all twenty-three counties in Wyoming are compared with returns that may have been generated from alternative investment policy alternatives. Market values and capital appreciation for school trust lands in Wyoming are estimated from hedonic models formulated from ranch sales data and grazing revenue data.