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Land Rents And Prices An Econometric Test Of The Capitalization Formula

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  • Kim, Hun
  • Andersson, Hans
  • Ramaswami, Bharat

Abstract

This paper uses cross-equation restrictions on the parameters of vector autoregressions of land prices and rents, implied by the capitalization formula, to test its validity in a mid-western state.The formula was found to be valid for the period 1921-1953 but was not supported by data for the subsequent period 1954-1986.

Suggested Citation

  • Kim, Hun & Andersson, Hans & Ramaswami, Bharat, 1988. "Land Rents And Prices An Econometric Test Of The Capitalization Formula," 1988 Annual Meeting, August 1-3, Knoxville, Tennessee 270207, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea88:270207
    DOI: 10.22004/ag.econ.270207
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    References listed on IDEAS

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    1. Vasavada, Utpal & White, Fred, 1987. "Capital Asset Valuation Under Risk Aversion," Regional Research Projects > 1987: S-180 Annual Meeting, March 22-25, 1987, San Antonio, Texas 272335, Regional Research Projects > S-180: An Economic Analysis of Risk Management Strategies for Agricultural Production Firms.
    2. Robert J. Shiller, 1984. "Stock Prices and Social Dynamics," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 15(2), pages 457-510.
    3. Sargent, Thomas J., 1979. "A note on maximum likelihood estimation of the rational expectations model of the term structure," Journal of Monetary Economics, Elsevier, vol. 5(1), pages 133-143, January.
    4. Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
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