Loss Aversion in Farmland Price Expectations

Todd Kuethe (), Brady Brewer and Chad Fiechter

Land Economics, 2022, vol. 98, issue 1, 98-114

Abstract: Farmland price expectations play a critical role in farm investment decisions, yet previous studies suggest that market experts’ expectations are not rational. That is, market experts do not make efficient use of all available information. This article tests the degree to which expectations are consistent with rational expectations, under symmetric and asymmetric loss, based on aggregate expectations from Purdue Farmland Values and Cash Rent Survey between 1979 and 2019. We find robust evidence that farmland market experts are averse to overpredicting farmland price increases. When this asymmetry is considered, farmland market experts are shown to be rational loss minimizers.

JEL-codes: C53 Q11 (search for similar items in EconPapers)
Date: 2022
Note: DOI: 10.3368/le.98.1.102020-0158R
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://le.uwpress.org/cgi/reprint/98/1/98
A subscription is required to access pdf files. Pay per article is available.

Related works:
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:uwp:landec:v:98:y:2022:i:1:p:98-114

Access Statistics for this article

More articles in Land Economics from University of Wisconsin Press
Bibliographic data for series maintained by ().