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Are Expert Opinions Accurate? Panel Data Evidence from the Iowa Land Value Survey

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  • Wendong Zhang
  • Sergio H. Lence
  • Todd Kuethe

Abstract

Opinion surveys are the dominant method for gauging U.S. farmland values. However, there is no systematic evaluation of how opinions are formulated and change over time. Using panel data of agricultural professionals from the Iowa Land Value Survey over 2005–2015, we investigate how surveyed experts update their farmland value estimates. We find that experts almost fully correct their prior “errors” in a single period. Experts’ opinions also incorporate most of the prevailing price innovations in one period. Our Bayesian estimation technique simultaneously addresses the unobservability and nonstationarity of prevailing farmland values and the Nickell bias in short dynamic panels.

Suggested Citation

  • Wendong Zhang & Sergio H. Lence & Todd Kuethe, 2021. "Are Expert Opinions Accurate? Panel Data Evidence from the Iowa Land Value Survey," Land Economics, University of Wisconsin Press, vol. 97(4), pages 875-892.
    • Handle: RePEc:uwp:landec:v:97:y:2021:i:4:p:875-892
    Note: DOI: 10.3368/le.97.4.080820-0124R
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    References listed on IDEAS

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    1. Oppedahl, David B., 2015. "Farmland Values and Credit Conditions," AgLetter, Federal Reserve Bank of Chicago, vol. 2015(1968), May.
    2. Wendong Zhang & Alejandro Plastina & Wendiam Sawadgo, 2018. "Iowa Farmland Ownership and Tenure Survey 1982-2017: A Thirty-five Year Perspective," Center for Agricultural and Rural Development (CARD) Publications 18-wp580, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    3. Dhaene, Geert & Jochmans, Koen, 2016. "Likelihood Inference In An Autoregression With Fixed Effects," Econometric Theory, Cambridge University Press, vol. 32(5), pages 1178-1215, October.
    4. Allison Borchers & Jennifer Ifft & Todd Kuethe, 2014. "Linking the Price of Agricultural Land to Use Values and Amenities," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(5), pages 1307-1320.
    5. Zhang, Wendong & Duffy, Michael D., 2017. "Land Quality Perceptions in Expert Opinion Surveys: Evidence from Iowa," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2017.
    6. Tony Lancaster, 2002. "Orthogonal Parameters and Panel Data," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(3), pages 647-666.
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    8. Sergio H. Lence, 2001. "Farmland Prices in the Presence of Transaction Costs: A Cautionary Note," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 985-992.
    9. Harris, Richard D. F. & Tzavalis, Elias, 1999. "Inference for unit roots in dynamic panels where the time dimension is fixed," Journal of Econometrics, Elsevier, vol. 91(2), pages 201-226, August.
    10. Stinn, Matthew & Duffy, Michael, 2012. "What is the Precision of Land Survey Values?," Staff General Research Papers Archive 36001, Iowa State University, Department of Economics.
    11. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-1426, November.
    12. Stinn, Matthew & Duffy, Michael D., 2012. "What is the Precision of Land Survey Values?," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 27(3), pages 1-4.
    13. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
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    Cited by:

    1. Albulena Basha & Wendong Zhang & Chad Hart, 2021. "The impacts of interest rate changes on US Midwest farmland values," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 81(5), pages 746-766, February.
    2. Plastina, Alejandro & Zhang, Wendong & Sawadgo, Wendiam, 2024. "By How Much Can Appraised Farm Values Differ Across Appraisers?," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2024, January.
    3. Chen, Le & Rejesus, Roderick M. & Aglasan, Serkan & Hagen, Stephen & Salas, William, 2022. "The Impact of No-Till Production on Agricultural Land Values in the US Midwest," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322445, Agricultural and Applied Economics Association.
    4. Le Chen & Roderick M. Rejesus & Serkan Aglasan & Stephen Hagen & William Salas, 2023. "The impact of no‐till on agricultural land values in the United States Midwest," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(3), pages 760-783, May.

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    More about this item

    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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