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Do Buyers’ Characteristics and Personal Relationships Affect Agricultural Land Prices?

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  • Philip Kostov

Abstract

The influence of buyer and personal relationship characteristics on agricultural land prices has received little attention in the literature. Recently, Perry and Robison (2001) used a restricted nonlinear specification to model the influence of personal relationships on the implicit prices of land characteristics. In this paper a more flexible alternative model is proposed. An approach to general model specification and model selection is presented. The results indicate that buyer characteristics and personal relationships exert nonuniform effects on the implicit prices of land characteristics. Our results support the hypothesis that social capital affects the terms of trade in the land market.

Suggested Citation

  • Philip Kostov, 2010. "Do Buyers’ Characteristics and Personal Relationships Affect Agricultural Land Prices?," Land Economics, University of Wisconsin Press, vol. 86(1), pages 48-65.
    • Handle: RePEc:uwp:landec:v:86:y:2010:i:1:p:48-65
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    References listed on IDEAS

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    1. Philip Kostov & Myles Patton & Seamus McErlean, 2008. "Nonparametric analysis of the influence of buyers' characteristics and personal relationships on agricultural land prices," Agribusiness, John Wiley & Sons, Ltd., vol. 24(2), pages 161-176.
    2. Lars Nesheim, 2002. "Equilibrium sorting of heterogeneous consumers across locations: theory and empirical implications," CeMMAP working papers CWP08/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    3. Glaeser, Edward L. & Sacerdote, Bruce, 2000. "The Social Consequences of Housing," Journal of Housing Economics, Elsevier, vol. 9(1-2), pages 1-23, March.
    4. Patrick Bajari & C. Lanier Benkard, 2005. "Demand Estimation with Heterogeneous Consumers and Unobserved Product Characteristics: A Hedonic Approach," Journal of Political Economy, University of Chicago Press, vol. 113(6), pages 1239-1276, December.
    5. Myles Patton & Seamus McErlean, 2003. "Spatial Effects within the Agricultural Land Market in Northern Ireland," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(1), pages 35-54, March.
    6. Feng Xu & Ron C. Mittelhammer & Paul W. Barkley, 1993. "Measuring the Contributions of Site Characteristics to the Value of Agricultural Land," Land Economics, University of Wisconsin Press, vol. 69(4), pages 356-369.
    7. David L. Chicoine, 1981. "Farmland Values at the Urban Fringe: An Analysis of Sale Prices," Land Economics, University of Wisconsin Press, vol. 57(3), pages 353-362.
    8. Elad, R.L. & Clifton, I.D. & Epperson, J.E., 1994. "Hedonic Estimation Applied to the Farmland Market in Georgia," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 26(2), pages 351-366, December.
    9. Thomas Kneib & Torsten Hothorn & Gerhard Tutz, 2009. "Variable Selection and Model Choice in Geoadditive Regression Models," Biometrics, The International Biometric Society, vol. 65(2), pages 626-634, June.
    10. Kennedy, Gary A. & Henning, Steven A. & Vandeveer, Lonnie R. & Dai, Ming, 1997. "An Empirical Analysis Of The Louisiana Rural Land Market," Station Bulletins 31682, Louisiana State University, Department of Agricultural Economics and Agribusiness.
    11. Gerhard Tutz & Harald Binder, 2006. "Generalized Additive Modeling with Implicit Variable Selection by Likelihood-Based Boosting," Biometrics, The International Biometric Society, vol. 62(4), pages 961-971, December.
    12. Gregory M. Perry & Lindon J. Robison, 2001. "Evaluating the Influence of Personal Relationships on Land Sale Prices: A Case Study in Oregon," Land Economics, University of Wisconsin Press, vol. 77(3), pages 385-398.
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    2. Ludo Peeters & Eloi Schreurs & Steven Passel, 2017. "Heterogeneous Impact of Soil Contamination on Farmland Prices in the Belgian Campine Region: Evidence from Unconditional Quantile Regressions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(1), pages 135-168, January.
    3. Jia Chen & Jingwen Xu & Hongxiao Zhang, 2022. "Explanation of the Phenomenon “Different Prices on the Same Land” in the Farmland Transfer Market—Evidence from China’s Farmland Transfer Market," Agriculture, MDPI, vol. 12(12), pages 1-13, December.
    4. Tang, Liang & Ma, Xianlei & Zhou, Yuepeng & Shi, Xiaoping & Ma, Jia, 2019. "Social relations, public interventions and land rent deviation: Evidence from Jiangsu Province in China," Land Use Policy, Elsevier, vol. 86(C), pages 406-420.
    5. Johanna Choumert & Pascale Phelinas, 2015. "Farmland Rental Values in GM Soybean Areas of Argentina: Do Contractual Arrangements Matter?," CERDI Working papers halshs-01237771, HAL.
    6. 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.
    7. Curtiss, Jarmila & Jelínek, Ladislav & Hruška, Martin & Medonos, Tomáš & Vilhelm, Václav, 2013. "The Effect of Heterogeneous Buyers on Agricultural Land Prices: The Case of the Czech Land Market," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 62(2).
    8. Curtiss, Jarmila & Jelínek, Ladislav & Hruška, Martin & Medonos, Tomáš & Vilhelm, Václav, 2013. "The Effect of Heterogeneous Buyers on Agricultural Land Prices: The Case of the Czech Land Market," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 62(02), pages 1-18, May.
    9. Seifert, Stefan & Hüttel, Silke & Werwatz, Axel, 2023. "Organic cultivation and farmland prices: Does certification matter?," FORLand Working Papers 28 (2023), Humboldt University Berlin, DFG Research Unit 2569 FORLand "Agricultural Land Markets – Efficiency and Regulation".
    10. Richard J. Vyn & Max Zongyuan Shang, 2021. "Prices paid for farmland in Ontario: Does buyer type matter?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 69(1), pages 59-72, March.
    11. Marlene Kionka, Todd Kuethe, Oliver Mußhoff, Matthias Ritter, Martin Odening, 2022. "Bargaining Power in the Agricultural Land Market," 2022 Agricultural and Rural Finance Markets in Transition, October 17-18, 2022, Detroit, Michigan 329249, Regional Research Committee NC-1177 (formerly NC-1014): Agricultural and Rural Finance Markets in Transition.
    12. Kionka, Marlene & Kuethe, Todd H. & Musshoff, Oliver & Odening, Martin & Ritter, Matthias, 2022. "Bargaining Power in the Agricultural Land Rental Market," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322186, Agricultural and Applied Economics Association.
    13. Tingyu Li & Bo Liu & Shuhao Tan, 2022. "Can Social Capital Help the Youngers Rent Land?—A Case of Pastoral Areas in Inner Mongolia, P.R. China," Land, MDPI, vol. 11(10), pages 1-15, October.
    14. Shao-Chi Fang & Wen-Chih Yeh & Chun-Chang Lee & Zheng Yu, 2021. "Factors Affecting the Price of Cost-Equivalent Land: Application of Hierarchical Linear Modeling," Land, MDPI, vol. 10(7), pages 1-23, June.

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    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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