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A Representative Market Model Of Farmland Bid Prices

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  • Pederson, Glenn D.

Abstract

A land bid-price model is formulated which integrates asset pricing models form prior studies to illustrate the singular and joint effects of ordinary and capital gains taxes, growth of returns, diseconomies of size, and risk behavior on farmland prices. An application of the model to primary data from cash grains farms illustrates that the ceteris paribus effect of increased marginal tax rates on a perpetual, growing income stream is to increase its present value. Larger farms in higher marginal tax brackets are shown to have a competitive advantage over smaller, lower tax bracket farms.

Suggested Citation

  • Pederson, Glenn D., 1982. "A Representative Market Model Of Farmland Bid Prices," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 7(2), pages 1-14, December.
    • Handle: RePEc:ags:wjagec:32271
    DOI: 10.22004/ag.econ.32271
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    File URL: https://ageconsearch.umn.edu/record/32271/files/07020279.pdf
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    References listed on IDEAS

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    1. Wesley N. Musser & Kostas G. Stamoulis, 1981. "Evaluating the Food and Agriculture Act of 1977 with Firm Quadratic Risk Programming," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 63(3), pages 447-456.
    2. Duane G. Harris & Richard F. Nehring, 1976. "Impact of Farm Size on the Bidding Potential for Agricultural Land," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 58(2), pages 161-169.
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    Cited by:

    1. Curtiss, Jarmila & Jelínek, Ladislav & Hruška, Martin & Medonos, Tomáš & Vilhelm, Václav, 2013. "The Effect of Heterogeneous Buyers on Agricultural Land Prices: The Case of the Czech Land Market," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 62(2), pages 116-133.
    2. Curtiss, Jarmila & Jelínek, Ladislav & Hruška, Martin & Medonos, Tomáš & Vilhelm, Václav, 2013. "The Effect of Heterogeneous Buyers on Agricultural Land Prices: The Case of the Czech Land Market," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 62(2).
    3. Curtiss, Jarmila & Jelínek, Ladislav & Hruška, Martin & Medonos, Tomáš & Vilhelm, Václav, 2013. "The Effect of Heterogeneous Buyers on Agricultural Land Prices: The Case of the Czech Land Market," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 62(02), pages 1-18, May.

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    Keywords

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