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Examining Changes in the Value of Rural Land in New Zealand between 1989 and 2003

Author

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  • Steven Stillman

    (Motu Economic & Public Policy Research)

Abstract

This paper uses valuation data from Quotable Value New Zealand to examine changes in the value of the rural land in New Zealand between 1989 and 2003. The value of rural land reflects the profitability of agriculture as well as the returns to alternative land uses, and has a large impact on the prosperity of rural areas. The paper highlights the importance of both changes in land use and changes in the value of land in different uses in explaining overall changes in land values. It also examines the relationship among productive characteristics of the land, the local climate, various local amenities, and changes in land values and land use to better understand what factors have been driving overall changes in the value of rural land across New Zealand. We find that the real value of rural land in all uses increased substantially over the years being examined. Land use in rural areas also changed considerably during this period, but these changes in land use were essentially uncorrelated with changes in land values. Our regression results indicate that rural land values increased the most in less populated areas with good climates and local amenities. Initial land use also plays an important role in explaining the variation in changes in rural land values with greater increases in land values found in areas with more land initially devoted to urban uses and commercial forestry, and less land initially devoted to horticulture and lifestyle uses.

Suggested Citation

  • Steven Stillman, 2005. "Examining Changes in the Value of Rural Land in New Zealand between 1989 and 2003," Urban/Regional 0509015, EconWPA.
  • Handle: RePEc:wpa:wuwpur:0509015
    Note: Type of Document - pdf; pages: 46
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/urb/papers/0509/0509015.pdf
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    References listed on IDEAS

    as
    1. Plantinga, Andrew J. & Lubowski, Ruben N. & Stavins, Robert N., 2002. "The effects of potential land development on agricultural land prices," Journal of Urban Economics, Elsevier, vol. 52(3), pages 561-581, November.
    2. Bastian, Chris T. & McLeod, Donald M. & Germino, Matthew J. & Reiners, William A. & Blasko, Benedict J., 2002. "Environmental amenities and agricultural land values: a hedonic model using geographic information systems data," Ecological Economics, Elsevier, vol. 40(3), pages 337-349, March.
    3. Sandrey, Ronald A. & Reynolds, Russell G., 1990. "Farming Without Subsidies: New Zealand's Experience in the 1980s," 1990 Conference (34th), February 13-15, 1990, Brisbane, Australia 145356, Australian Agricultural and Resource Economics Society.
    4. Andrew J. Plantinga & Douglas J. Miller, 2001. "Agricultural Land Values and the Value of Rights to Future Land Development," Land Economics, University of Wisconsin Press, vol. 77(1), pages 56-67.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Suzi Kerr & Joanna Hendy & Emma Brunton & Isabelle Sin, 2005. "The likely regional impacts of an agricultural emissions policy in New Zealand: Preliminary analysis," Working Papers 05_08, Motu Economic and Public Policy Research.
    2. Lock, Kelly & Hendy, Joanna & Kerr, Suzi, 2006. "Sheep and Beef Production Costs Across New Zealand: Introducing the Spatial Dimension," 2006 Conference, August 24-25, 2006, Nelson, New Zealand 31952, New Zealand Agricultural and Resource Economics Society.
    3. Suzi Kerr & Kit Rutherford, 2008. "Nutrient Trading in Lake Rotorua: Determining Net Nutrient Inputs," Working Papers 08_03, Motu Economic and Public Policy Research.
    4. Adams, Thomas & Turner, James A., 2012. "An investigation into the effects of an emissions trading scheme on forest management and land use in New Zealand," Forest Policy and Economics, Elsevier, vol. 15(C), pages 78-90.

    More about this item

    Keywords

    Land Use; Land Value; New Zealand; Rural Areas;

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R22 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Other Demand
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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