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Land Prices and Farm‐Based Returns
Author(s) -
Phipps Tim T.
Publication year - 1984
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1240920
Subject(s) - credence , economics , residual , granger causality , aggregate (composite) , econometrics , land price , agricultural economics , mathematics , statistics , materials science , algorithm , composite material
The theoretical and empirical relationship between farm‐based residual returns, the opportunity cost of farmland, and farmland prices is developed. Temporal hypotheses concerning the source of land price movements are tested using a variant of Granger causality. In the aggregate, farmland prices are found to be unidirectionally “caused” by residual farm‐based returns. The findings support the hypothesis that farmland prices are determined mainly within the farm sector and lend credence to the use of extrapolative expectations processes in structural farmland price models.