The Speculative Value of Farm Real Estate

Jeffrey Stokes and Arthur T. Cox ()
Additional contact information
Arthur T. Cox: University of Northern Iowa

Journal of Real Estate Research, 2014, vol. 36, issue 2, 169-186

Abstract: Farm real estate in the Midwest has increased in value at rates not seen since the 1970s. The combination of low interest rates, an increase in the domestic demand for corn for ethanol production, and higher world demand for grain in conjunction with lower stocks have all pushed grain prices higher for commodities grown on farmland. A question that naturally arises is whether or not there is speculation in farm real estate and if so, to what extent speculation has contributed to the increase in farmland values? In this paper, a simple dynamic and stochastic farmland valuation model is developed. Calibrating the model to current economic conditions for corn grown on high quality Iowa farmland suggests that there is a modest speculative component in current farmland value, but higher corn prices would be necessary for speculation to be a significant component of total value.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://pages.jh.edu/jrer/papers/pdf/past/vol36n02/9826-02.169_186.pdf Full text (application/pdf)

Related works:
Journal Article: The Speculative Value of Farm Real Estate (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jre:issued:v:36:n:2:2014:p:169-186

Ordering information: This journal article can be ordered from
Diane Quarles American Real Estate Society Manager of Member Services Clemson University Box 341323 Clemson, SC 29634-1323
http://pages.jh.edu/jrer/about/get.htm

Access Statistics for this article

Journal of Real Estate Research is currently edited by Dr. Ko Wang

More articles in Journal of Real Estate Research from American Real Estate Society American Real Estate Society Clemson University School of Business & Behavioral Science Department of Finance 401 Sirrine Hall Clemson, SC 29634-1323.
Bibliographic data for series maintained by JRER Graduate Assistant/Webmaster ().