Agricultural bankers’ farmland price expectations

Abstract Previous studies provide conflicting evidence on the degree to which Federal Reserve surveys of agricultural bankers provide useful information on the future direction of farm real estate values. We use unbalanced panel of responses from the Federal Reserve Bank of Chicago’s Land Values and...

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Bibliographic Details
Published in:European review of agricultural economics 2021-01, Vol.48 (1), p.42-59
Main Authors: Kuethe, Todd H, Oppedahl, David
Format: Article
Language:English
Subjects:
Agricultural land
Central banks
Expectations
Land appraisals
Polls & surveys
Prices
Property values
Real estate
Respondents
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Summary:Abstract Previous studies provide conflicting evidence on the degree to which Federal Reserve surveys of agricultural bankers provide useful information on the future direction of farm real estate values. We use unbalanced panel of responses from the Federal Reserve Bank of Chicago’s Land Values and Credit Conditions Survey between 1993Q1 and 2019Q2 to empirically test adaptive, rational and extrapolative expectations. We find that respondents extrapolate recent farmland price experiences but are overly cautious, as observed farmland price changes tend to be greater than expected. This is the first study of individual farmland price expectations collected by Federal Reserve surveys of agricultural bankers.
ISSN:0165-1587
1464-3618
DOI:10.1093/erae/jbaa017