IDEAS home Printed from https://ideas.repec.org/p/ags/aaea04/20153.html
   My bibliography  Save this paper

A Comparison Of Capital Measures In U.S. Agriculture

Author

Listed:
  • Andersen, Matthew A.
  • Alston, Julian M.

Abstract

This study compares two panel data sets that measure capital input at the state-level in U.S. agriculture. Despite a number of similarities between the data sets, such as the composition of assets, aggregation procedures, and time frame, an examination of the final estimates of capital service flows reveals that they are drastically different for all 48 contiguous states. We examine the methods used to construct the capital series for each data set, consider some important differences in data sources and the types of data used to construct the capital measures, and outline the main assumptions concerning depreciation, service lives, interest rates, aggregation, and the scope of goods included in each of the data sets. The analysis indicates that an important statistic in the index of capital services in U.S. agriculture is the stock of buildings on farms. We conclude that the primary difference between the measures of capital input in the data sets relates to differences in estimates of the stock of buildings on farms. Given the apparent importance of the measure of the stock of buildings in the aggregate index of capital services in U.S. agriculture, more research is needed to ensure that the measure of the stock of buildings is accurate and meaningful. Once this has been accomplished there should be more agreement on an accurate measure of capital services in U.S. agriculture.

Suggested Citation

  • Andersen, Matthew A. & Alston, Julian M., 2004. "A Comparison Of Capital Measures In U.S. Agriculture," 2004 Annual meeting, August 1-4, Denver, CO 20153, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea04:20153
    DOI: 10.22004/ag.econ.20153
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/20153/files/sp04an03.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.20153?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Richard E. Just & John A. Miranowski, 1993. "Understanding Farmland Price Changes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(1), pages 156-168.
    2. Jorgenson, Dale W, 1996. "Empirical Studies of Depreciation," Economic Inquiry, Western Economic Association International, vol. 34(1), pages 24-42, January.
    3. Martin Feldstein, 1983. "Inflation, Portfolio Choice, and Prices of Land and Corporate Stock," NBER Chapters, in: Inflation, Tax Rules, and Capital Formation, pages 229-242, National Bureau of Economic Research, Inc.
    4. Oscar R. Burt, 1986. "Econometric Modeling of the Capitalization Formula for Farmland Prices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(1), pages 10-26.
    5. Coen, Robert M, 1975. "Investment Behavior, the Measurement of Depreciation, and Tax Policy," American Economic Review, American Economic Association, vol. 65(1), pages 59-74, March.
    6. Hulten, Charles R. & Wykoff, Frank C., 1981. "The estimation of economic depreciation using vintage asset prices : An application of the Box-Cox power transformation," Journal of Econometrics, Elsevier, vol. 15(3), pages 367-396, April.
    7. Ball, V. Eldon & Butault, Jean-Pierre & Nehring, Richard F., 2001. "U.S. Agriculture, 1960-96 A Multilateral Comparison of Total Factor Productivity," Technical Bulletins 33590, United States Department of Agriculture, Economic Research Service.
    8. John B. Penson & Dean W. Hughes & Glenn L. Nelson, 1977. "Measurement of Capacity Depreciation Based on Engineering Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 59(2), pages 321-329.
    9. Alston, Julian M. & Pardey, Philip G. & Taylor, Michael J., 2001. "Agricultural science policy: changing global agendas," Food policy statements 32, International Food Policy Research Institute (IFPRI).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andersen, Matthew A. & Alston, Julian M. & Pardey, Philip G., 2009. "Capital Service Flows: Concepts and Comparisons of Alternative Measures in U.S. Agriculture," Staff Papers 50098, University of Minnesota, Department of Applied Economics.
    2. 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.
    3. 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.
    4. Jean Cavailhès & Alban Richard & Nathalie Taverdet, 1996. "Des rentes classiques aux options de rentes. Une analyse de l'évolution du prix des terres en France," Revue Économique, Programme National Persée, vol. 47(4), pages 963-981.
    5. Hassler, John & Krusell, Per & Storesletten, Kjetil & Zilibotti, Fabrizio, 2008. "On the optimal timing of capital taxes," Journal of Monetary Economics, Elsevier, vol. 55(4), pages 692-709, May.
    6. B. James Deaton & Chad Lawley, 2022. "A survey of literature examining farmland prices: A Canadian focus," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 70(2), pages 95-121, June.
    7. Fiechter, Chad & Kuethe, Todd & Zhang, Wendong, 2023. "Information Rigidities and Farmland Value Expectations," ISU General Staff Papers 202306131414240000, Iowa State University, Department of Economics.
    8. van Schalkwyk, H. D. & van Rooyen, C. J. & Jooste, A., 1994. "Possible Effects Of An Agricultural Land Tax In South Africa," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 33(4), December.
    9. Newell, Richard G. & Papps, Kerry L. & Sanchirico, James N., 2005. "Asset Pricing in Created Markets for Fishing Quotas," Discussion Papers 10639, Resources for the Future.
    10. Katchova, Ani L. & Sherrick, Bruce J. & Barry, Peter J., 2002. "The Effects Of Risk On Farmland Values And Returns," 2002 Annual meeting, July 28-31, Long Beach, CA 19660, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Binswanger, Hans P. & Deininger, Klaus & Feder, Gershon, 1995. "Power, distortions, revolt and reform in agricultural land relations," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 42, pages 2659-2772, Elsevier.
    12. Benoît A. Delbecq & Todd H. Kuethe & Allison M. Borchers, 2014. "Identifying the Extent of the Urban Fringe and Its Impact on Agricultural Land Values," Land Economics, University of Wisconsin Press, vol. 90(4), pages 587-600.
    13. Pavel Ciaian & d’Artis Kancs & Johan Swinnen, 2010. "EU Land Markets and the Common Agricultural Policy," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 53(3), pages 1-31.
    14. Terregrossa, Ralph A., 1997. "Capital depreciation and investment demand," The Quarterly Review of Economics and Finance, Elsevier, vol. 37(1), pages 79-95.
    15. 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.
    16. Jason Henderson & Sean Moore, 2005. "The impact of wildlife recreation on farmland values," Research Working Paper RWP 05-10, Federal Reserve Bank of Kansas City.
    17. W. Erwin Diewert, 2003. "Measuring Capital," NBER Working Papers 9526, National Bureau of Economic Research, Inc.
    18. Bruce L. Gardner & H. B. Atwater, Jr. & John R. Block, 1988. "International Competition in Agriculture and U.S. Farm Policy," NBER Chapters, in: The United States in the World Economy, pages 423-474, National Bureau of Economic Research, Inc.
    19. Mishra, Ashok K. & Moss, Charles B. & Erickson, Kenneth W., 2004. "Effect Of Debt Solvency On Farmland Values: A Panel Cointegration Approach," 2004 Annual meeting, August 1-4, Denver, CO 20261, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    20. Arvid Raknerud & Dag Rønningen & Terje Skjerpen, 2007. "A Method for Improved Capital Measurement by Combining Accounts and Firm Investment Data. A revised version," Discussion Papers 365, Statistics Norway, Research Department.

    More about this item

    Keywords

    Agricultural and Food Policy;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaea04:20153. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.