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Evaluating the benefits from transport infrastructure in agriculture: a hedonic analysis of farmland prices

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  • Sheng, Yu
  • Jackson, Thomas
  • Lawson, Kenton

Abstract

Access to transport infrastructure generates a range of benefits to the agriculture sector; many of which are difficult to measure directly. In this study, we use hedonic regression analysis of farm-level data to examine the contribution of transport infrastructure to the value of farmland traded between 2009 and 2011 through its impact on farm productivity. We show that a one per cent reduction in the cost of transportation between farms and ports leads to a 0.33 per cent increase in land prices, and there is no significant difference between rail and road transportation at the aggregate level. Moreover, the benefits generated by particular types of infrastructure services vary between industries and with farm size, suggesting there are multiple channels through which public infrastructure influences agricultural production. Our findings help to inform future investment decisions in Australia and in other countries by providing new evidence regarding the benefits of existing transport infrastructure.

Suggested Citation

  • Sheng, Yu & Jackson, Thomas & Lawson, Kenton, 2018. "Evaluating the benefits from transport infrastructure in agriculture: a hedonic analysis of farmland prices," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 62(2), April.
    • Handle: RePEc:ags:aareaj:313574
    DOI: 10.22004/ag.econ.313574
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    1. Roberts, Shane & Brooks, Kathleen & Nogueira, Lia & Walters, Cory G., 2022. "The role of quality characteristics in pricing hard red winter wheat," Food Policy, Elsevier, vol. 108(C).

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