Agricultural, recreational and urban influences on agricultural land prices
Purpose - This paper aims to determine the effects of agricultural, recreational and urban variables on Oklahoma land prices. Design/methodology/approach - An econometric model is estimated using price of agricultural land parcels as the dependent variable and independent variables representing agricultural, recreational and urban uses. Recreational variables include county-level recreational income from Agricultural Census data as well as deer harvest for each county. Urban variables are functions of population and income for each county. The agricultural variables include rainfall as well as crop returns for cropland and cattle prices for pasture. Findings - Agricultural variables are the most important, followed by urban and then recreational variables. Transaction prices are higher than commonly used land-value survey data. The major recreational variable is deer harvest, which is more important in small tracts. The value of pasture is now greater than cropland. Small tract sizes receive substantial premiums. Research limitations/implications - Agriculture is still an important part of the Oklahoma economy, so the findings might differ in more densely populated states. As with most econometric models, there are possible biases due to errors in measurement or missing explanatory variables. Practical implications - The paper provides information that could be used by those wanting to estimate land value or wanting to manage land to increase its value. Originality/value - The paper differs from previous work in both variables considered and the data used. Also, most previous work has not as directly addressed the issue of the relative importance of agricultural, recreational and urban variables.
Volume (Year): 69 (2009)
Issue (Month): 2 (July)
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