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By How Much Can Appraised Farm Values Differ Across Appraisers?

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  • Plastina, Alejandro
  • Zhang, Wendong
  • Sawadgo, Wendiam

Abstract

We compared 54 appraisal reports, completed by nine Certified General Appraisers (CGAs) for three Iowa farms at two points in time (2019 and 2020), to evaluate the variability of appraised values and its causes. Our findings confirm that, despite the norms and regulations that CGAs abide by, the appraisal process is subjective in nature, and appraised values can differ by as much as 20% of their average appraised values. Furthermore, observed discrepancies in basic facts considered by CGAs to form their expert opinions on the value of a farm, such as tillable acres and productivity indexes, are non-trivial.

Suggested Citation

  • Plastina, Alejandro & Zhang, Wendong & Sawadgo, Wendiam, 2024. "By How Much Can Appraised Farm Values Differ Across Appraisers?," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2024, January.
    • Handle: RePEc:ags:jasfmr:342901
    DOI: 10.22004/ag.econ.342901
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    References listed on IDEAS

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    1. Daniel P. Bigelow & Jennifer Ifft & Todd Kuethe, 2020. "Following the Market? Hedonic Farmland Valuation Using Sales Prices versus Self-reported Values," Land Economics, University of Wisconsin Press, vol. 96(3), pages 418-440.
    2. Wendong Zhang & Sergio H. Lence & Todd Kuethe, 2021. "Are Expert Opinions Accurate? Panel Data Evidence from the Iowa Land Value Survey," Land Economics, University of Wisconsin Press, vol. 97(4), pages 875-892.
    3. David J. Drozd & Bruce B. Johnson, 2004. "Dynamics of a Rural Land Market Experiencing Farmland Conversion to Acreages: The Case of Saunders County, Nebraska," Land Economics, University of Wisconsin Press, vol. 80(2), pages 294-311.
    4. Shan Ma & Scott M. Swinton, 2012. "Hedonic Valuation of Farmland Using Sale Prices versus Appraised Values," Land Economics, University of Wisconsin Press, vol. 88(1), pages 1-15.
    5. Shultz, Steven, 2006. "Differences Between Agricultural Land Value Surveys and Market Sales," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2006, pages 1-8.
    6. Stinn, Matthew & Duffy, Michael, 2012. "What is the Precision of Land Survey Values?," Staff General Research Papers Archive 36001, Iowa State University, Department of Economics.
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