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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

This article estimates the impact of the 2007–2008 residential housing market bust on farmland values, using parcel-level farmland sales data from 2001–2010 for a 50-county region under urbanization pressure in western Ohio. Hedonic model estimates reveal that farmland was not immune to the residential housing bust; the portion of farmland value attributable to proximity to urban areas was almost cut in half shortly after the bust in 2009–2010. Nonetheless, total farmland prices remained relatively stable in the 2000s, likely due to increased demand for agricultural commodities. Our results are robust to different assumptions about the structure of the unobserved spatial correlation.

Suggested Citation

  • Zhang, Wendong & Nickerson, Cynthia J., 2015. "Housing Market Bust and Farmland Values: Identifying the Changing Influence of Proximity to Urban Centers," ISU General Staff Papers 201511010700001590, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:201511010700001590
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    5. 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.
    6. 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," USDA Miscellaneous 316342, United States Department of Agriculture.
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    10. 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).
    11. 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.
    12. 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.
    13. 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.
    14. 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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    18. 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.
    19. 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.
    20. 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.
    21. Vasco Capela Tavares & Fernando Tavares & Eulália Santos, 2022. "The Value of Farmland and Its Determinants—The Current State of the Art," Land, MDPI, vol. 11(11), pages 1-14, October.
    22. 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.

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    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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