Campus Units
Economics
Document Type
Article
Publication Version
Published Version
Publication Date
2002
Journal or Book Title
Southern Economic Journal
Volume
68
Issue
3
First Page or Article ID Number
549
Last Page
565
DOI
10.2307/1061717
Abstract
The present study introduces a theoretical land pricing model that allows for proportional transaction costs, and a corresponding kernel regression test. The model is tested with farmland returns data for 20 individual states, and also with two aggregate U.S. level series. The constant discount rate (CDR) present value model (PVM) of farmland prices is strongly rejected. However, it is found that the behavior of land prices and rents is consistent with the CDR-PVM in the presence of empirically observed values of transaction costs. Findings are very robust in that they apply to both individual state-level data and the U.S. aggregate-level series.
Rights
Works produced by employees of the U.S. Government as part of their official duties are not copyrighted within the U.S. The content of this document is not copyrighted.
Language
en
File Format
application/pdf
Recommended Citation
de Fontnouvelle, Patrick and Lence, Sergio H., "Transaction Costs and the Present Value “Puzzle” of Farmland Prices" (2002). Economics Publications. 35.
https://lib.dr.iastate.edu/econ_las_pubs/35
Comments
This article is from Southern Economic Journal 68 (2002): 549, doi:10.2307/1061717. Posted with permission.