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The Housing Market Bust and Farmland Values: Identifying the Changing Influence of Proximity to Urban Centers

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  • Zhang, Wendong
  • Nickerson, Cynthia J.

Abstract

Though about one-third of farmland is subject to urban influences, little is known about how changes in urban land markets affect farmland values. This paper identifies the impact of the recent residential housing market bust and subsequent economic recession on farmland values, using parcel-level farmland sales data from 2001-2010 for a 50-county region under urbanization pressure in Western Ohio. Our estimates from hedonic regressions reveal that farmland was not immune to the residential housing bust; the portion of farmland value attributable to urban demands for developable land was almost completely wiped out shortly after the housing market bust in 2009-2010.

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  • Zhang, Wendong & Nickerson, Cynthia J., 2013. "The Housing Market Bust and Farmland Values: Identifying the Changing Influence of Proximity to Urban Centers," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149870, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea13:149870
    DOI: 10.22004/ag.econ.149870
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    6. Su, Tian & Dharmasena, Senarath & Leatham, David J. & Gilliland, Charles E, 2022. "Examining Joint Influence of Agricultural and Urban Factors on Texas Rural Land Values," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322504, Agricultural and Applied Economics Association.
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    8. Meissner, Luise & Plogmann, Jana & Musshoff, Oliver, 2021. "Are Policy Changes Visible in German Farmland Price Time Series?," 2021 Conference, August 17-31, 2021, Virtual 315027, International Association of Agricultural Economists.
    9. Gaurav Arora & Peter T. Wolter & Hongli Feng & David A. Hennessy, 2016. "Role of Ethanol Plants in Dakotas Land Use Change: Incorporating Flexible Trends in the Difference-in-Difference Framework with Remotely-Sensed Data," Center for Agricultural and Rural Development (CARD) Publications 16-wp564, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    10. 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.
    11. Dubman, Robert & Key, Nigel & Law, Jonathan & Litkowski, Carrie & Mandalay, Okkar & Subedi, Dipak & Todd, Jessica E & Whitt, Christine, 2021. "Agricultural Income and Finance Situation and Outlook: 2021 Edition," Economic Information Bulletin 327362, United States Department of Agriculture, Economic Research Service.
    12. Chad Lawley, 2021. "COVID‐19 and Canadian farmland markets in 2020," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 69(2), pages 291-298, June.
    13. Ifft, Jennifer & Bigelow, Daniel P. & Savage, Jeffrey, 2018. "The Impact of Irrigation Restrictions on Cropland Values in Nebraska," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 43(2), May.
    14. Anita M. Chaudhry & Dean H. K. Fairbanks & Christoph Nolte, 2024. "Water Market Participation and Agricultural Land Values," Land Economics, University of Wisconsin Press, vol. 100(1), pages 127-147.
    15. Meyer, Kevin & Keiser, David A., 2016. "Adapting to Climate Change Through Tile Drainage: A Structural Ricardian Analysis," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235932, Agricultural and Applied Economics Association.
    16. Burns, Christopher & Key, Nigel & Tulman, Sarah & Borchers, Allison & Weber, Jeremy, 2018. "Farmland Values, Land Ownership, and Returns to Farmland, 2000-2016," Economic Research Report 276249, United States Department of Agriculture, Economic Research Service.
    17. 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.
    18. Arora, Gaurav & Wolter, Peter T. & Feng, Hongli & Hennessy, David A., 2015. "Role of Ethanol Plants in Dakotas’ Land Use Change: Analysis Using Remotely Sensed Data," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205877, Agricultural and Applied Economics Association.
    19. Plogmann, Jana & Mußhoff, Oliver & Odening, Martin & Ritter, Matthias, 2020. "What Moves the German Land Market? A Decomposition of the Land Rent-Price Ratio," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 69(1).
    20. Cao, Y. & Swallow, B. & Qiu, F., 2018. "Does Municipal Development Policy Affect Property Values: A Quasi-Experimental Hedonic Model Approach in Alberta, Canada," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277044, International Association of Agricultural Economists.
    21. 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.
    22. Meyer, Kevin Michael, 2017. "Three essays on environmental and resource economics," ISU General Staff Papers 201701010800006585, Iowa State University, Department of Economics.

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    More about this item

    Keywords

    Agricultural and Food Policy; Community/Rural/Urban Development; Land Economics/Use;
    All these keywords.

    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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