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The Determinants of Farmland Values in Canada

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Author Info
Weerahewa, Jeevika
Meilke, Karl D.
Vyn, Richard J.
Haq, Zahoor
Abstract

This study has examined the determinants of farmland values in Canada. The empirical results for the period 1959-2004 show that farmland values seem to be disconnected from adjusted earnings per acre regardless of model specification. Differences in model specification can change the interpretation of the importance of government payments in influencing farm land values. If a time trend is included in the land value function government payments appear to have no effect on land values; when the time trend is removed they have a statistically significant positive effect on land values. With respect to the other explanatory variables, the higher the population density, the higher farmland values, indicating that urbanization increases farmland values. Furthermore, increases in real interest rates lower farmland value as the capitalization formula suggests.

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Paper provided by Canadian Agricultural Trade Policy Research Network in its series Working Papers with number 43461.

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Date of creation: Mar 2008
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Handle: RePEc:ags:catpwp:43461

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Related research
Keywords: land values; Canada; Agricultural and Food Policy; Demand and Price Analysis;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Campbell, John Y & Shiller, Robert J, 1987. "Cointegration and Tests of Present Value Models," Journal of Political Economy, University of Chicago Press, vol. 95(5), pages 1062-88, October. [Downloadable!] (restricted)
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  2. Michael J. Roberts & Barrett Kirwan & Jeffrey Hopkins, 2003. "The Incidence of Government Program Payments on Agricultural Land Rents: The Challenges of Identification," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 85(3), pages 762-769, 08. [Downloadable!] (restricted)
  3. Gardner, Bruce, 2002. "U.S. Commodity Policies And Land Prices," Working Papers 28560, University of Maryland, Department of Agricultural and Resource Economics. [Downloadable!]
  4. Barry K. Goodwin & Ashok K. Mishra & François N. Ortalo-Magné, 2003. "What's Wrong with Our Models of Agricultural Land Values?," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 85(3), pages 744-752, 08. [Downloadable!] (restricted)
  5. Falk, Barry L., 2003. "Formally Testing the Present Value Model of Farmland Prices," Staff General Research Papers 11093, Iowa State University, Department of Economics.
  6. Hardie, Ian W & Narayan, Tulika A & Gardner, Bruce L, 2001. " The Joint Influence of Agricultural and Nonfarm Factors on Real Estate Values: An Application to the Mid-Atlantic Region," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 83(1), pages 120-32, February. [Downloadable!] (restricted)
  7. Moss, Charles B. & Shonkwiler, J.S. & Reynolds, John E., 1989. "Government Payments To Farmers And Real Agricultural Asset Values In The 1980s," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 21(02), December. [Downloadable!]
  8. Saleem Shaik & Glenn A. Helmers & Joseph A. Atwood, 2005. "The Evolution of Farm Programs and Their Contribution to Agricultural Land Values," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 87(5), pages 1190-1197, November. [Downloadable!] (restricted)
  9. Alfons Weersink & Steve Clark & Calum G. Turvey & Rakhal Sarker, 1999. "The Effect of Agricultural Policy on Farmland Values," Land Economics, University of Wisconsin Press, vol. 75(3), pages 425-439. [Downloadable!] (restricted)
  10. Carl Johan Lagerkvist, 2005. "Agricultural policy uncertainty and farm level adjustments--the case of direct payments and incentives for farmland investment," European Review of Agricultural Economics, Oxford University Press for the Foundation for the European Review of Agricultural Economics, vol. 32(1), pages 1-23, March.
  11. Fred Kuchler & Abebayehu Tegene, 1993. "Asset Fixity and the Distribution of Rents from Agricultural Policies," Land Economics, University of Wisconsin Press, vol. 69(4), pages 428-437. [Downloadable!] (restricted)
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