Farm Land Prices : Explainable or Illogical ?

Of all markets, the land market has been thought independent variables.2 Respondents were asked to to be one of the most difficult to explain. Techniques report on one randomly selected 1970 transaction for predicting land prices leave much to be desired. with which they were familiar. Of the 155 Nevertheless, the importance of this market continues questionnaires sent, 63 were returned with essentially to grow as fixed costs of commercial farm firms complete information about a given sale. An escalate, due to farm expansion and other factors. additional 53 respondents returned partial data about Conventional techniques for building models to a transaction, e.g., if bare land were involved the explain farm land prices have not been as useful as questions concerning buildings were irrelevant and, when similar statistical procedures have been used therefore, not answered. Virtually all sales reported elsewhere. Data problems have been conspicuous. The were for tracts in outstate Missouri rather than near heterogeneity of many populations has created major metropolitan centers. Thus, the sample data difficulties. Clearly, additional refinement of models analyzed were from a relatively homogenous is needed.l population. The objectives of this analysis were to The data obtained were grouped into several (1) explain the variation in land prices for a categories. In addition to the dependent variable, sample of Missouri farms, and price per acre, seven groups of independent variables (2) explore a methodology which might were specified. They included (1) indicators of land overcome some of the difficulties alluded to productivity; (2) extent and condition of buildings above. and fences; (3) proximity to and size of educational To accomplish these objectives special efforts institutions; (4) location relative to urban centers and were made to obtain data on a homogenous sample of arteries of transportation; (5) reason for purchase, farm transactions. Further, an effort was made to i.e., for farm consolidation, investment, family include a considerable amount of detail in the model. operation, etc., (6) extent of competition in the land