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Returns to Farm Real Estate Revisited
Author(s) -
Irwin Scott H.,
Forster D. Lynn,
Sherrick Bruce J.
Publication year - 1988
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 - 10.2307/1241496
Subject(s) - portfolio , proxy (statistics) , real estate , economics , financial economics , inflation (cosmology) , capitalization rate , sample (material) , risk premium , estate , monetary economics , real estate investment trust , finance , physics , chemistry , chromatography , machine learning , theoretical physics , computer science
Barry's research on farm real estate returns suggests that when farm assets are viewed as a part of the nation's wealth portfolio, returns are not persistently low, as is commonly asserted in policy debates. This paper extends Barry's research by explicitly accounting for the effects of uncertain inflation, using a broader market proxy, and lengthening the sample period. The results suggest farm real estate offers only slight (not substantial) premiums above those for systematic risk, contributes little systematic risk to a well‐diversified portfolio, and exhibits substantial risk due to uncertain inflation.