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Farm Real Estate Price Components, 1920–78
Author(s) -
Castle Emery N.,
Hoch Irving
Publication year - 1982
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 - 10.2307/1241167
Subject(s) - capitalization rate , real estate , capitalization , capital (architecture) , economics , cost approach , value (mathematics) , production (economics) , agricultural economics , business , real estate development , real estate investment trust , microeconomics , finance , mathematics , geography , statistics , linguistics , philosophy , archaeology
The research reported demonstrates that farm real estate price involves important components in addition to the capitalized value of rent for the services of land and buildings in farm production, develops an expectations model for the farm real estate market, and compares predictions from the expectations model with farm real estate prices for the 1920–78 period. Capitalized rent explains only about half of real estate values both in the 1970s and over the longer 1920–78 period. The remainder can be explained by the capitalization of capital gains, including real gains or losses from price level changes.