Population, Income, and Farmland Pricing in an Open Economy

Huijian Dong and Xiaomin Guo
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Huijian Dong: Kate Tiedemann School of Business and Finance, University of South Florida, 140 7th Ave S, St. Petersburg, FL 33701, USA
Xiaomin Guo: Kate Tiedemann School of Business and Finance, University of South Florida, 140 7th Ave S, St. Petersburg, FL 33701, USA

IJFS, 2020, vol. 8, issue 4, 1-18

Abstract: Farmland valuation models usually incorporate local purchasing power as one of the pricing factors. A plausible rationale is that a larger population and higher income per capita imply increasing demand for agricultural products and farmland. In this paper, we study the relationship between the agricultural land prices, the regional population, and income per capita in an open economy setting in nominal and real variable terms using data from 1929 to 2018 at the state level. We show that in most areas of the United States, agricultural land prices are less affected by the state population or personal income. The valuation of agricultural land should not factor in the local purchasing power factors, with a few exceptions.

Keywords: agricultural product; land valuation; real estate; purchasing power; local output; trade (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2020
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