Administrative valuation of Soviet agricultural land : results using Lithuanian production data

New land tenure arrangements in the USSR require that agricultural producers pay for land use. The current distorted pricing system and the absence of functioning land markets complicate land valuation, and slow the adoption of new property relations. In a market economy that functions well, agricultural land would earn its approximate marginal value product in agricultural production. This value can be measured empirically from production data and can serve as an appropriate initial value for users'fees. The author estimates marginal value products for land for 1,032 collective and state farms in Lithuania using farm-level data for 1986 and 1987 and compares the marginal value products derived from actual received producer prices with those derived from border prices with alternative assumed exchange rates for the ruble.