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Hedonic Valuation of Farmland Using Sale Prices versus Appraised Values

Author

Listed:
  • Shan Ma
  • Scott M. Swinton

Abstract

Farmland provides agricultural products and natural amenities, as well as residential sites. The emergence of exurbanization appears to be changing the demand for natural amenities and their role in determining land values. To better understand how appraised value and sale price capture the determinants of farmland value in a region facing exurbanization, this study applies the hedonic method to land transaction data in southwestern Michigan during 2003–2007. Results suggest that appraised values are a poor substitute for sale prices if the research goal is to understand dynamically evolving determinants of land value in exurbanizing regions, especially the value of natural amenities.

Suggested Citation

  • 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.
    • Handle: RePEc:uwp:landec:v:88:y:2012:i:1:p:1-15
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    References listed on IDEAS

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    1. N/A, 1974. "Appraisal," National Institute Economic Review, National Institute of Economic and Social Research, vol. 67(1), pages 3-7, February.
    2. Kelejian, Harry H & Prucha, Ingmar R, 1998. "A Generalized Spatial Two-Stage Least Squares Procedure for Estimating a Spatial Autoregressive Model with Autoregressive Disturbances," The Journal of Real Estate Finance and Economics, Springer, vol. 17(1), pages 99-121, July.
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    4. Clapp, John M & Giaccotto, Carmelo, 1992. "Estimating Price Trends for Residential Property: A Comparison of Repeat Sales and Assessed Value Methods," The Journal of Real Estate Finance and Economics, Springer, vol. 5(4), pages 357-374, December.
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    6. Arthur Grimes & Andrew Aitken, 2008. "Water, Water Somewhere: The Value of Water in a Drought-Prone Farming Region," Working Papers 08_10, Motu Economic and Public Policy Research.
    7. Wittenberg, Eric & Harsh, Stephen B., 2007. "2007 Michigan Land Values and Leasing Rates," Agricultural Economic Report Series 6317, Michigan State University, Department of Agricultural, Food, and Resource Economics.
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    Citations

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    Cited by:

    1. Choumert, Johanna & Phélinas, Pascale, 2015. "Determinants of agricultural land values in Argentina," Ecological Economics, Elsevier, vol. 110(C), pages 134-140.
    2. repec:eee:regeco:v:65:y:2017:i:c:p:104-115 is not listed on IDEAS
    3. Anonymous & Phélinas, Pascale, 2014. "A Hedonic Analysis Of Agricultural Land Values In A Gm Soybean Area Of Argentina," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182750, European Association of Agricultural Economists.
    4. Hayato Nakanishi, 2017. "Quasi-experimental evidence for the importance of accounting for fear when evaluating catastrophic events," Empirical Economics, Springer, vol. 52(2), pages 869-894, March.
    5. repec:zbw:rwimat:080 is not listed on IDEAS
    6. Temesgen, Chalachew & Dupraz, Pierre, 2014. "The role of farmers’ competition on farmland price in local markets: Bretagne region of France," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170610, Agricultural and Applied Economics Association.
    7. Ludo Peeters & Eloi Schreurs & Steven Passel, 2017. "Heterogeneous Impact of Soil Contamination on Farmland Prices in the Belgian Campine Region: Evidence from Unconditional Quantile Regressions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(1), pages 135-168, January.
    8. repec:gam:jsusta:v:10:y:2018:i:4:p:1198-:d:141266 is not listed on IDEAS
    9. William Larson, 2015. "New Estimates of Value of Land of the United States," BEA Working Papers 0120, Bureau of Economic Analysis.
    10. Phillip an de Meulen & Martin Micheli & Sandra Schaffner, 2014. "Documentation of German Real Estate Market Data - Sample of Real Estate Advertisements on the Internet Platform ImmobilienScout24," RWI Materialien, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, pages 33, 09.
    11. Wendong Zhang & Cynthia J. Nickerson, 2015. "Housing Market Bust and Farmland Values: Identifying the Changing Influence of Proximity to Urban Centers," Land Economics, University of Wisconsin Press, vol. 91(4), pages 605-626.
    12. Allan, Corey & Kerr, Suzi, 2013. "Examining Patterns in and Drivers of Rural Land Values," 2013 Conference, August 28-30, 2013, Christchurch, New Zealand 160191, New Zealand Agricultural and Resource Economics Society.
    13. Hansen, Winslow D. & Naughton, Helen T., 2013. "The effects of a spruce bark beetle outbreak and wildfires on property values in the wildland–urban interface of south-central Alaska, USA," Ecological Economics, Elsevier, vol. 96(C), pages 141-154.
    14. Czyżewski, Bazyli, 2016. "Political Rents of European Farmers in the Sustainable Development Paradigm. International, national and regional perspective," MPRA Paper 74253, University Library of Munich, Germany.
    15. Frey, Elaine F. & Palin, Marissa B. & Walsh, Patrick J. & Whitcraft, Christine R., 2013. "Spatial Hedonic Valuation of a Multi-use Urban Wetland in Southern California," Agricultural and Resource Economics Review, Cambridge University Press, vol. 42(02), pages 387-402, August.
    16. an de Meulen, Philipp & Micheli, Martin & Schaffner, Sandra, 2014. "Documentation of German real estate market data: Sample of real estate advertisements on the internet platform ImmobilienScout24, 2007-2013," RWI Materialien 80, RWI - Leibniz-Institut für Wirtschaftsforschung.
    17. Czyżewski, Bazyli & Trojanek, Radosław, 0. "Drivers of agricultural land prices in terms of different functions of rural areas in Poland," Problems of Agricultural Economics, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
    18. Hansen, Winslow D. & Mueller, Julie M. & Naughton, Helen T., 2014. "Wildfire in Hedonic Property Value Studies," Western Economics Forum, Western Agricultural Economics Association, vol. 13(01).

    More about this item

    JEL classification:

    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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