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Nonparametric analysis of the influence of buyers' characteristics and personal relationships on agricultural land prices

Author

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  • Philip Kostov

    (Lancashire Business School, University of Central Lancashire, Preston PR1 2HE, United Kingdom)

  • Myles Patton

    (Agri-Food and Biosciences Institute, Newforge Lane, Belfast, BT9 5PX Northern Ireland)

  • Seamus McErlean

    (Department of Agricultural and Rural Development, Dundonald House, Upper Newtownards Road, Belfast BT4 3SB, Northern Ireland)

Abstract

The influence of buyer and personal relationship characteristics on agricultural land prices has received little attention in the literature. Recently, G.M. Perry and L.J. Robinson (2001) used a restricted nonlinear specification to model the influence of personal relationships (and other factors) on the implicit prices of land characteristics. In this article, we extend and generalize their specification using nonparametric neural networks. The results indicate that buyer characteristics and personal relationships affect the terms of trade in the land market, which is consistent with the social capital hypothesis. The impact of buyer characteristics and personal relationships on the implicit prices of land characteristics is, however, non-uniform and highly nonlinear. [EconLit citations: C290, D450, Q150]. © 2008 Wiley Periodicals, Inc.

Suggested Citation

  • Philip Kostov & Myles Patton & Seamus McErlean, 2008. "Nonparametric analysis of the influence of buyers' characteristics and personal relationships on agricultural land prices," Agribusiness, John Wiley & Sons, Ltd., vol. 24(2), pages 161-176.
  • Handle: RePEc:wly:agribz:v:24:y:2008:i:2:p:161-176
    DOI: 10.1002/agr.20152
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    File URL: http://hdl.handle.net/10.1002/agr.20152
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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. Robison, Lindon J. & Myers, Robert J. & Siles, Marcelo E., 1999. "Social Capital, The Terms Of Trade, And The Distribution Of Income," Staff Papers 11546, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    3. Elad, R.L. & Clifton, I.D. & Epperson, J.E., 1994. "Hedonic Estimation Applied to the Farmland Market in Georgia," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 26(02), pages 351-366, December.
    4. Kennedy, Gary A. & Henning, Steven A. & Vandeveer, Lonnie R. & Dai, Ming, 1997. "An Empirical Analysis Of The Louisiana Rural Land Market," Station Bulletins 31682, Louisiana State University, Department of Agricultural Economics and Agribusiness.
    5. 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..
    6. Lindon Robison & A. Allan Schmid & Marcelo Siles, 2002. "Is Social Capital Really Capital?," Review of Social Economy, Taylor & Francis Journals, vol. 60(1), pages 1-21.
    7. Lars Nesheim, 2002. "Equilibrium sorting of heterogeneous consumers across locations: theory and empirical implications," CeMMAP working papers CWP08/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    8. Gregory M. Perry & Lindon J. Robison, 2001. "Evaluating the Influence of Personal Relationships on Land Sale Prices: A Case Study in Oregon," Land Economics, University of Wisconsin Press, vol. 77(3), pages 385-398.
    9. 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.
    10. Feng Xu & Ron C. Mittelhammer & Paul W. Barkley, 1993. "Measuring the Contributions of Site Characteristics to the Value of Agricultural Land," Land Economics, University of Wisconsin Press, vol. 69(4), pages 356-369.
    11. David L. Chicoine, 1981. "Farmland Values at the Urban Fringe: An Analysis of Sale Prices," Land Economics, University of Wisconsin Press, vol. 57(3), pages 353-362.
    12. Lee, Tae-Hwy & White, Halbert & Granger, Clive W. J., 1993. "Testing for neglected nonlinearity in time series models : A comparison of neural network methods and alternative tests," Journal of Econometrics, Elsevier, vol. 56(3), pages 269-290, April.
    13. repec:dau:papers:123456789/6486 is not listed on IDEAS
    14. Richard W. Dunford & Carole E. Marti & Ronald C. Mittelhammer, 1997. "A Case Study of Rural Land Prices at the Urban Fringe Including Subjective Buyer Expectations," Land Economics, University of Wisconsin Press, vol. 62(1), pages 10-16.
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    Cited by:

    1. Nagler, Amy M. & Menkhaus, Dale J. & Bastian, Christopher T. & Ehmke, Mariah D. & Coatney, Kalyn T., 2013. "Subsidy Incidence in Factor Markets: An Experimental Approach," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 45(01), pages 17-33, February.
    2. Kostov, Philip & Davidova, Sophia & Bailey, Alastair, 2016. "Effect of family labour on output of farms in selected EU Member States: A non-parametric quantile regression approach," 90th Annual Conference, April 4-6, 2016, Warwick University, Coventry, UK 236358, Agricultural Economics Society.
    3. Philip Kostov, 2010. "Do Buyers’ Characteristics and Personal Relationships Affect Agricultural Land Prices?," Land Economics, University of Wisconsin Press, vol. 86(1), pages 48-65.

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