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Spatial dependence in agricultural land prices: does it exist?

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  • Philip Kostov

Abstract

Trade‐offs arise between spatial dependence and choice of functional form in agricultural land price hedonic models. We discuss these trade‐offs and how they can create spurious spatial dependence. Using a land sales dataset with apparent spatial dependence, we implement a semiparametric approach avoiding potential problems with the functional form. The results show that in addition to being nonlinear, the impacts are also characterized by significance thresholds that are difficult to capture in a parametric model. More importantly, we fail to detect any spatial dependence demonstrating that inappropriate functional form can indeed be responsible for finding spatial dependence in hedonic models.

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  • Philip Kostov, 2009. "Spatial dependence in agricultural land prices: does it exist?," Agricultural Economics, International Association of Agricultural Economists, vol. 40(3), pages 347-353, May.
    • Handle: RePEc:bla:agecon:v:40:y:2009:i:3:p:347-353
    DOI: 10.1111/j.1574-0862.2009.00375.x
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    References listed on IDEAS

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    1. Ivar Ekeland & James J. Heckman & Lars Nesheim, 2004. "Identification and Estimation of Hedonic Models," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages 60-109, February.
    2. Håvard Rue, 2001. "Fast sampling of Gaussian Markov random fields," Journal of the Royal Statistical Society Series B, Royal Statistical Society, vol. 63(2), pages 325-338.
    3. Myles Patton & Seamus McErlean, 2003. "Spatial Effects within the Agricultural Land Market in Northern Ireland," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(1), pages 35-54, March.
    4. Daniel P. McMillen, 2003. "Spatial Autocorrelation Or Model Misspecification?," International Regional Science Review, , vol. 26(2), pages 208-217, April.
    5. repec:dau:papers:123456789/6486 is not listed on IDEAS
    6. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    7. M. Patton & S.A. M Erlean, 2004. "Spatial Effects within the Agricultural Land Market in Northern Ireland: A Reply," Journal of Agricultural Economics, Wiley Blackwell, vol. 55(1), pages 127-133, March.
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    Cited by:

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    2. Khan, Salman & Ali, Ghaffar & Shah, Syed Attaullah & Jan, Abbas Ullah & Jan, Dawood & Fayaz, M., 2015. "A Hedonic Analysis of Agricultural Land Prices in Pakistan's Peshawar District," Asian Journal of Agriculture and Rural Development, Asian Economic and Social Society (AESS), vol. 6(04), January.
    3. O'Donoghue, Cathal & Lopez, Jeremey & O’Neill, Stephen & Ryan, Mary, 2015. "AHedonic Price Model of Self-Assessed Agricultural Land Values," 150th Seminar, October 22-23, 2015, Edinburgh, Scotland 212639, European Association of Agricultural Economists.
    4. Carlo Fezzi & Ian Bateman, 2015. "The Impact of Climate Change on Agriculture: Nonlinear Effects and Aggregation Bias in Ricardian Models of Farmland Values," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 2(1), pages 57-92.
    5. Alfredo Cartone & Paolo Postiglione, 2016. "Modelli spaziali di regressione quantilica per l?analisi della convergenza economica regionale," RIVISTA DI ECONOMIA E STATISTICA DEL TERRITORIO, FrancoAngeli Editore, vol. 2016(3), pages 28-48.
    6. Marques, Felipe César & Telles, Tiago Santos, 2023. "Spatial effects are determinants of agricultural land prices in Brazil," Revista de Economia e Sociologia Rural (RESR), Sociedade Brasileira de Economia e Sociologia Rural, vol. 61(3), January.
    7. Salman Khan & Ghaffar Ali & Syed Attaullah Shah & Abbas Ullah Jan & Dawood Jan & M. Fayaz, 2016. "A hedonic analysis of agricultural land prices in Pakistan`s Peshawar district," Asian Journal of Agriculture and rural Development, Asian Economic and Social Society, vol. 6(4), pages 59-67, April.

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