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The Determinants of Farmland Values in Canada

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  • Weerahewa, Jeevika
  • Meilke, Karl D.
  • Vyn, Richard J.
  • Haq, Zahoor Ul

Abstract

This study has examined the determinants of farmland values in Canada. The empirical results for the period 1959-2004 show that farmland values seem to be disconnected from adjusted earnings per acre regardless of model specification. Differences in model specification can change the interpretation of the importance of government payments in influencing farm land values. If a time trend is included in the land value function government payments appear to have no effect on land values; when the time trend is removed they have a statistically significant positive effect on land values. With respect to the other explanatory variables, the higher the population density, the higher farmland values, indicating that urbanization increases farmland values. Furthermore, increases in real interest rates lower farmland value as the capitalization formula suggests.

Suggested Citation

  • Weerahewa, Jeevika & Meilke, Karl D. & Vyn, Richard J. & Haq, Zahoor Ul, 2008. "The Determinants of Farmland Values in Canada," Working Papers 43461, Canadian Agricultural Trade Policy Research Network.
    • Handle: RePEc:ags:catpwp:43461
    DOI: 10.22004/ag.econ.43461
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    Cited by:

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    2. Feichtinger, Paul & Salhofer, Klaus, 2013. "What Do We Know about the Influence of Agricultural Support on Agricultural Land Prices?," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 62(02), pages 1-15, May.
    3. Mela, Giulio & Longhitano, Davide & Povellato, Andrea, 2012. "The evolution of land values in Italy. Does the influence of agricultural prices really matter?," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122479, European Association of Agricultural Economists.
    4. Thibodeau, David R. & Clark, J. Stephen, 2009. "Government support, transfer efficiency, and moral hazard within heterogeneous regions in Canadian Agriculture," 2009 Conference, August 16-22, 2009, Beijing, China 51806, International Association of Agricultural Economists.
    5. Huijian Dong & Xiaomin Guo, 2020. "Population, Income, and Farmland Pricing in an Open Economy," IJFS, MDPI, vol. 8(4), pages 1-18, October.
    6. Feichtinger, Paul & Salhofer, Klaus, 2013. "What Do We Know about the Influence of Agricultural Support on Agricultural Land Prices?," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 62(2).

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    Agricultural and Food Policy; Demand and Price Analysis;

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