Development of Land Assets Valuation Methodology in Agriculture of Ukraine
14 Nov 2020-pp 1042-1051
TL;DR: In this article, the need to revise the methods of valuation of agricultural land in market conditions, taking into account the moratorium on land sales, has been discussed, with the aim of providing investment support to the agricultural sector of the economy.
Abstract: The article substantiates the need to revise the methods of valuation of agricultural land in market conditions, taking into account the moratorium on land sales. In the process of developing market relations in agriculture, land resources become the subject of economic circulation, which makes it possible to transform them into land assets. However, in the existing institutional conditions, land resources do not create capital in agricultural production, which requires justification of the mechanisms for involving them in economic turnover with the aim of providing investment support to the agricultural sector of the economy.
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TL;DR: In this paper, an econometric model is formulated to explain the dynamic behavior in farmland prices and the adjustment path of land prices in response to a perturbation in rents is a protracted dampened cycle.
Abstract: An econometric model is formulated to explain the dynamic behavior in farmland prices. A second-order rational distributed lag on net crop-share rents received by landlords captures the dynamic movements of prices and performs well in conditional post-sample forecasts. The adjustment path of land prices in response to a perturbation in rents is a protracted dampened cycle. The implicitly estimated tax-free capitalization rate on rent associated with equilibrium land price is 4.0%. Neither the expected rate of inflation nor an exponential trend on rent expectations has a significant effect on land prices.
268 citations
TL;DR: In this article, the authors assess the investment and productivity impacts of the recent low-cost land certification implemented in the Tigray region of Ethiopia, using a unique household and farm-plot-level panel data set, with data from before and up to eight years after the reform.
Abstract: New land reforms are again high on the policy agenda and low-cost, propoor reforms are being tested in poor countries. This article assesses the investment and productivity impacts of the recent low-cost land certification implemented in the Tigray region of Ethiopia, using a unique household and farm-plot-level panel data set, with data from before and up to eight years after the reform. Alternative econometric methods were used to test and control for endogeneity of certification and for unobserved household heterogeneity. Significant positive impacts were found, including effects on the maintenance of soil conservation structures, investment in trees, and land productivity. Copyright 2007, Oxford University Press.
240 citations
TL;DR: In this article, a hedonic model of Illinois farmland values is estimated using county-level cross-section time-series data, including land productivity, parcel size, improvements, distances to Chicago and other large cities, an urban-rural index, livestock production through swine operation scale and farm density measures, population density, income, and inflation.
Abstract: A hedonic model of Illinois farmland values is estimated using county-level cross-section time-series data. Explanatory variables include land productivity, parcel size, improvements, distances to Chicago and other large cities, an urban‐rural index, livestock production through swine operation scale and farm density measures, population density, income, and inflation. The inclusion of spatial and serial correlation components substantially improves the model fit. Farmland values decline with parcel size, ruralness, distance to Chicago and large cities, and swine farm density, and increase with soil productivity, population density, and personal income.
196 citations
TL;DR: In this paper, a simple capitalization formula model is used to determine whether subsidies are capitalized into land values, and the results indicate that income plus subsidies are mildly cointegrated with land values and the series are not too volatile.
Abstract: A simple capitalization formula model is used to determine whether subsidies are capitalized into land values. Using Saskatchewan annual data, it is found that while income by itself cannot support the secular growth in land values, income plus subsidies may. The results of this study indicate that income plus subsidies are mildly cointegrated with land values and the series are not too volatile. The evidence suggests that there is some support for the hypothesis that short-term subsidies are capitalized into land values; however, the evidence is not strong
Un modele a formule de capitalisation simple est utilise pour etablir si les subventions sont capitalisees dans les valeurs foncieres. A partir de donnees annuelles recueillies en Saskatchewan, on constate que si le revenu a lui seul ne suffit pas a soutenir la croissance a long terme des valeurs foncieres, il le peut lorsqu'il est complete par des subventions. Le resultat de l'etude montre que le revenu complete par les subventions est moderement coinegre avec la valeur de la terre et que les series obtenues ne fluctuent pas outre mesure. Il semble que les subventions a court tenne soient Capitalisees dans la valeur des terres, encore que les preuves a l'appui ne soient pas des plus convaincantes
59 citations
TL;DR: In this article, the authors examined the relationship between farm asset returns and systematic market factors, concluding that farmland adds little systematic risk to a well-diversified portfolio and that any persistent low return on agricultural assets may be due to differences in relative risk.
Abstract: The first theme addressed in this paper is agricultural asset performance. The low rate of return on agricultural assets has been of particular interest to policy makers. From a market portfolio perspective, several studies have analyzed the relationship between farm asset returns and systematic market factors, concluding that farmland adds little systematic risk to a well‐diversified portfolio. Because asset values adjust so that the return to each asset is in equilibrium with its relative risk, any persistent low return on agricultural assets may be due to differences in relative risk. The paper’s second theme is the valuation of farmland in the United States. Numerous studies have examined the factors affecting farmland values. Most have used the standard present value capitalization formula relating land values to land rents, although these models have been rejected by empirical data. Several studies have reformulated and improved the performance of the present value models. Since changes in rates of return of agricultural assets and land values can have drastic consequences for farmers’ wealth and sector solvency, future research needs in this area will continue.
27 citations