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Cash Rents and Land Values in U.S. Agriculture

Author

Listed:
  • Lindon J. Robison
  • David A. Lins
  • Ravi VenKataraman

Abstract

A firm-level land valuation model is deduced which depends on the expected growth rate in net cash returns to land, inflation expectations, and property, income, and capital gains taxes. It is then aggregated to obtain an aggregate two-sector land valuation model. That model is then estimated for twenty-four individual states for the period 1960–81. In addition, a pooled cross-sectional regression model is estimated combining the twenty-four-state data. The model results demonstrate that significant state differences exist in the land market and that in many states, agricultural land values are influenced by nonagricultural demand for land.

Suggested Citation

  • Lindon J. Robison & David A. Lins & Ravi VenKataraman, 1985. "Cash Rents and Land Values in U.S. Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(4), pages 794-805.
    • Handle: RePEc:oup:ajagec:v:67:y:1985:i:4:p:794-805.
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    File URL: http://hdl.handle.net/10.2307/1241819
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    Citations

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    Cited by:

    1. Pavel Ciaian & Edoardo Baldoni & d'Artis Kancs & Dušan Drabik, 2021. "The Capitalization of Agricultural Subsidies into Land Prices," Annual Review of Resource Economics, Annual Reviews, vol. 13(1), pages 17-38, October.
    2. Buchholz, Matthias & Danne, Michael & Musshoff, Oliver, 2022. "An experimental analysis of German farmers’ decisions to buy or rent farmland," Land Use Policy, Elsevier, vol. 120(C).
    3. Just, Richard E. & Miranowski, John A., 1988. "US Land Prices: Trends and Determinants," 1988 Conference, August 24-31, 1988, Buenos Aires, Argentina 183169, International Association of Agricultural Economists.
    4. Hardin, Erin M. & Bryant, Henry L. & Penson, John B., Jr., 2015. "Farmland Prices: The Return of a Bubble and Opportunities for Hedging," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205630, Agricultural and Applied Economics Association.
    5. Richard G. Newell & Kerry L. Papps & James N. Sanchirico, 2007. "Asset Pricing in Created Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(2), pages 259-272.
    6. Sanchirico, James & Newell, Richard & Papps, Kerry, 2005. "Asset Pricing in Created Markets for Fishing Quotas," RFF Working Paper Series dp-05-46, Resources for the Future.
    7. Stam, Jerome M., 1995. "Credit as a Factor Influencing Farmland Values," Staff Reports 278779, United States Department of Agriculture, Economic Research Service.
    8. Ana Claudia Sant’Anna & Ani L. Katchova, 2020. "Determinants of land value volatility in the U.S. Corn Belt," Applied Economics, Taylor & Francis Journals, vol. 52(37), pages 4058-4072, July.
    9. Li, Xin, 2016. "The Farmland Valuation Revisited," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 4(2), pages 1-14, April.
    10. Hardin, Erin M. & Bryant, Henry L., 2016. "A Real Option Approach to Valuing and Hedging Cropland Obligations," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 230148, Southern Agricultural Economics Association.
    11. Benavidez, Justin & Hardin, Erin M., 2017. "Forecasting Cash Rent Values," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252771, Southern Agricultural Economics Association.
    12. van der Riet, D. F. & Darroch, M. A. G., 1993. "Impact On Land Prices Of Export Demand For South African Deciduous Fruit: 1972-1992," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 32(4), December.
    13. Feichtinger, Paul & Salhofer, Klaus, 2013. "What Do We Know about the Influence of Agricultural Support on Agricultural Land Prices?," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 62(02), pages 1-15, May.
    14. Hanson, Steven D. & Myers, Robert J., 1995. "Testing for a time-varying risk premiumin the returns to U.S. farmland," Journal of Empirical Finance, Elsevier, vol. 2(3), pages 265-276, September.
    15. Bastian, Chris T. & McLeod, Donald M. & Germino, Matthew J. & Reiners, William A. & Blasko, Benedict J., 2002. "Environmental amenities and agricultural land values: a hedonic model using geographic information systems data," Ecological Economics, Elsevier, vol. 40(3), pages 337-349, March.
    16. Feichtinger, Paul & Salhofer, Klaus, 2013. "What Do We Know about the Influence of Agricultural Support on Agricultural Land Prices?," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 62(2).
    17. Laure Latruffe & Chantal Le Mouël, 2009. "Capitalization Of Government Support In Agricultural Land Prices: What Do We Know?," Journal of Economic Surveys, Wiley Blackwell, vol. 23(4), pages 659-691, September.

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