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Agricultural Land and the Small Parcel Size Premium Puzzle

Author

Listed:
  • B. Wade Brorsen
  • Damona Doye
  • Kalyn B. Neal

Abstract

Per acre prices of agricultural land increase as parcel sizes decrease. The puzzle is why all agricultural land is not sold in small parcels. Small parcels tend to be close to residential areas and close to quality roads. The small parcel premium lessens as parcels are more distant from urban areas. This suggests that much of the small parcel premium is due to parcels being purchased based on nonagricultural use values. Thus, an explanation of the small parcel premium puzzle is that land with low nonagricultural use values may not have a small parcel premium.

Suggested Citation

  • B. Wade Brorsen & Damona Doye & Kalyn B. Neal, 2015. "Agricultural Land and the Small Parcel Size Premium Puzzle," Land Economics, University of Wisconsin Press, vol. 91(3), pages 572-585.
    • Handle: RePEc:uwp:landec:v:91:y:2015:i:3:p:572-585
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    Citations

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    Cited by:

    1. Ritter, Matthias & Hüttel, Silke & Odening, Martin & Seifert, Stefan, 2020. "Revisiting the relationship between land price and parcel size in agriculture," Land Use Policy, Elsevier, vol. 97(C).
    2. Lars Isenhardt & Stefan Seifert & Silke Hüttel, 2023. "Tenant Favoritism and Right of First Refusals in Farmland Auctions: Competition and Price Effects," Land Economics, University of Wisconsin Press, vol. 99(2), pages 302-324.
    3. Abay, Kibrom A. & Chamberlin, Jordan & Berhane, Guush, 2021. "Are land rental markets responding to rising population pressures and land scarcity in sub-Saharan Africa?," Land Use Policy, Elsevier, vol. 101(C).
    4. Burcu Aksu & Suleyman Karaman, 2022. "Estimating the effect of a land parcel index using hedonic price analysis," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 68(11), pages 427-433.
    5. Glumac, Brano & Herrera-Gomez, Marcos & Licheron, Julien, 2019. "A hedonic urban land price index," Land Use Policy, Elsevier, vol. 81(C), pages 802-812.
    6. Ritter, Matthias & Huttel, Silke & Odening, Martin & Seifert, Stefan, 2019. "Revisiting The Relationship Between Land Price And Parcel Size," 2019 Conference (63rd), February 12-15, 2019, Melbourne, Australia 285062, Australian Agricultural and Resource Economics Society (AARES).
    7. Maximilian Humpesch & Stefan Seifert & Alfons Balmann & Silke Hüttel, 2022. "How does tenancy affect farmland prices? Effects of lease status, lease term and buyer type," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 83(2), pages 242-263, September.
    8. Stefan Seifert & Christoph Kahle & Silke Hüttel, 2021. "Price Dispersion in Farmland Markets: What Is the Role of Asymmetric Information?," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(4), pages 1545-1568, August.
    9. Ayala Wineman & Thomas S Jayne, 2018. "Land Prices Heading Skyward? An Analysis of Farmland Values across Tanzania," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 40(2), pages 187-214.
    10. Kvartiuk, Vasyl & Herzfeld, Thomas & Bukin, Eduard, 2022. "Decentralized public farmland conveyance: Rental rights auctioning in Ukraine," Land Use Policy, Elsevier, vol. 114(C).
    11. Jing Zhang & Colin Brown, 2018. "Spatial Variation and Factors Impacting Grassland Circulation Price in Inner Mongolia, China," Sustainability, MDPI, vol. 10(12), pages 1-15, November.
    12. Henning Schaak & Luise Meissner & Oliver Musshoff, 2023. "New insights on regional differences of the farmland price structure: An extended replication study on the parcel size–price relationship," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 45(3), pages 1427-1449, September.
    13. Jauernig, Johanna & Brosig, Stephan & Hüttel, Silke, 2023. "Profession and residency matter: Farmers' preferences for farmland price regulation in Germany," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 74(3), pages 816-834.
    14. 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.
    15. Foster, W., 2018. "Stability of the Ricardian land value model: Chile during rapid economic growth," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277125, International Association of Agricultural Economists.
    16. GLUMAC Brano & HERRERA-GOMEZ Marcos & LICHERON Julien, 2018. "A residential land price index for Luxembourg: Dealing with the spatial dimension," LISER Working Paper Series 2018-07, Luxembourg Institute of Socio-Economic Research (LISER).

    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
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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