Journal Article

Linking the Price of Agricultural Land to Use Values and Amenities

Allison Borchers, Jennifer Ifft and Todd Kuethe

in American Journal of Agricultural Economics

Published on behalf of Agricultural and Applied Economics Association

Volume 96, issue 5, pages 1307-1320
Published in print October 2014 | ISSN: 0002-9092
Published online June 2014 | e-ISSN: 1467-8276 | DOI: http://dx.doi.org/10.1093/ajae/aau041
Linking the Price of Agricultural Land to Use Values and Amenities

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  • Agricultural, Environmental, and Natural Resource Economics
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The recent appreciation in agricultural land values across the United States has raised a number of important questions for farmers, farmland owners, lenders, and policy makers. While traditional economic theory suggests that farmland values are determined by the discounted stream of expected returns, previous research has shown that agricultural land values are actually driven by a complex set of factors. This study leverages the unique characteristics of a national land-based USDA survey on farmland values and cash rents to estimate broad, national-level determinants of the market value of cropland and pastureland. Our results support past research findings that indicate farmland values are only partially explained by agricultural returns. We find that multiple nonagricultural attributes of farmland also contribute to the market value.

Keywords: Cropland; farmland values; pasture

Journal Article.  6407 words. 

Subjects: Agricultural, Environmental, and Natural Resource Economics ; Economic Development and Growth

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