Spatial and Temporal Spillovers in US Cropland Values
By: Burnett, J. Wesley; Lacombe, Donald J.; Wallander, Steven
Burnett, J. Wesley; Lacombe, Donald J.; Wallander, Steven, Spatial and Temporal Spillovers in US Cropland Values, Journal of Agricultural and Resource Economics, Volume 49, Issue 1, January 2024, Pages 63-80
While markets for agricultural commodities are often global, markets for cropland can be highly localized. Soil makeup and climate also tend to make farmland rental markets localized. This study compares several econometric models to measure the extent of spatial spillovers within these markets. A fully dynamic spatial model estimated on cropland transactions shows that sales are highly localized in the short term but face greater neighboring spillovers in the long term. Accounting for longer-term spatial interdependence of farmland markets can help to improve land value forecasts.