Farmland Prices in the Presence of Transaction Costs: A Cautionary Note

Sergio Lence

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: Explicit consideration of transaction costs is highly relevant for modeling farmland price behavior in a realistic manner. Unfortunately, there are numerous theoretical and empirical difficulties associated with doing so. From a research standpoint, such difficulties greatly increase the likelihood of mistakes in the theoretical derivations and/or in the design and application of empirical methods, thereby undermining the validity of the ensuing findings. This article highlights these issues by discussing the theoretical and empirical pitfalls of two seminal recent articles analyzing farmland prices in the presence of transaction costs.

Date: 2001-11-01
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Published in American Journal of Agricultural Economics, November 2001, vol. 83, pp. 985-992

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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:5052

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