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The Spatial Structure of Farmland Values: A Semiparametric Approach

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  • Wang, Haoying

Abstract

Although accounting for the spatial - temporal relationships in farmland valuation has gained attention in the literature recently, misspecification and incorrectly imposed assumptions on spatial weighting matrix can often produce misleading estimates and inference compared to maintaining ignorance of spatial dependence structure among spatially observed farmland values. In this study I assemble a panel data set using Pennsylvania county level farmland values reported in the U.S. Census of Agriculture between 1982 and 2007, and estimate the spatial weighting matrix among farmland values semiparametrically. A spatial lag panel data model with the consistently estimated spatial weighting matrix is then estimated via maximum likelihood estimation (MLE). The results show that the proposed approach can substantially improve the goodness of fit of the spatial hedonic model of farmland values therefore the reliability of obtained price elasticity estimates.

Suggested Citation

  • Wang, Haoying, 2013. "The Spatial Structure of Farmland Values: A Semiparametric Approach," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150330, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea13:150330
    DOI: 10.22004/ag.econ.150330
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    1. Manfred M. Fischer & Arthur Getis (ed.), 2010. "Handbook of Applied Spatial Analysis," Springer Books, Springer, number 978-3-642-03647-7, September.
    2. Lee, Lung-fei & Yu, Jihai, 2010. "Estimation of spatial autoregressive panel data models with fixed effects," Journal of Econometrics, Elsevier, vol. 154(2), pages 165-185, February.
    3. Joris Pinkse & Margaret E. Slade & Craig Brett, 2002. "Spatial Price Competition: A Semiparametric Approach," Econometrica, Econometric Society, vol. 70(3), pages 1111-1153, May.
    4. Charles B. Moss, 1997. "Returns, Interest Rates, and Inflation: How They Explain Changes in Farmland Values," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1311-1318.
    5. Haixiao Huang & Gay Y. Miller & Bruce J. Sherrick & Miguel I. Gómez, 2006. "Factors Influencing Illinois Farmland Values," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(2), pages 458-470.
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    Cited by:

    1. Vasco Capela Tavares & Fernando Tavares & Eulália Santos, 2022. "The Value of Farmland and Its Determinants—The Current State of the Art," Land, MDPI, vol. 11(11), pages 1-14, October.
    2. Wang, Haoying, 2018. "An Economic Impact Analysis of Oil and Natural Gas Development in the Permian Basin," MPRA Paper 89280, University Library of Munich, Germany.
    3. Wang, Haoying, 2020. "The economic impact of oil and gas development in the Permian Basin: Local and spillover effects," Resources Policy, Elsevier, vol. 66(C).

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    Land Economics/Use;

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