Population Growth and Farmland Option Value in Alabama

Sunjae Won and Mykel R. Taylor

Journal of the ASFMRA, 2026, vol. 2026

Abstract: This study investigates how short-run population growth influences the development option value of agricultural land, defined as the per-acre gap between market and current use values. Using parcel-level Alabama data (2016-2020), we quantify how both own and neighboring population density changes affect farmland valuation. Results show that changes in population density—particularly within a 10-mile radius—are positively associated with the development option value, with robust spatial spillovers (i.e., effects from nearby population growth). These effects vary by land use type. The findings highlight how dynamic development pressure, rather than static conditions, drives valuation gaps, informing farmland appraisal, tax policy, and land use planning.

Keywords: Community/Rural/Urban Development; Land Economics/Use (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ags:jasfmr:410272

DOI: 10.22004/ag.econ.410272

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