Farmland Accumulation and Prices

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37 Scopus citations

Abstract

A model of farmland accumulation is developed to study factors influencing U.S. farmland values. This model stresses the manner in which credit is allocated for land purchases. To secure necessary loans for additional land to expand farm size, the farmer provides as collateral his net accumulated wealth. Thus, land acquisitions are made to increase profits and to provide leverage for further land expansion. Besides income and consumption, the level of accumulated debt is one of the main determinants of farmland prices. Derived demand for farmland is developed, and the pricing equation for farmland is estimated as part of a structural equation model.

Original languageEnglish
Pages (from-to)710-719
Number of pages10
JournalAmerican Journal of Agricultural Economics
Volume64
Issue number4
DOIs
StatePublished - 1 Jan 1982
Externally publishedYes

Keywords

  • Debt
  • Farmland
  • Land prices
  • Wealth

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