Examining the Relationship between Land Values and Credit Availability

Increased credit availability facilitates land acquisition, but higher land values also hinder it. We investigate the impact of credit availability on land values, after regulatory changes in the lending system. We build an index of increased credit availability using Federal Reserve and Federal Dep...

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Bibliographic Details
Published in:Journal of agricultural and applied economics 2021-05, Vol.53 (2), p.209-228
Main Authors: Sant’Anna, Ana Claudia, Cowley, Cortney, Katchova, Ani L.
Format: Article
Language:English
Subjects:
Agricultural banking
Agricultural economics
Agricultural lending
Availability
Bank deposits
Cash flow
Collateral
Commercial banks
Economic factors
Economic growth
Farmers
Land acquisition
Land appraisals
Land purchases
Liquidity
Loans
Market prices
Productivity
Property values
Variables
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Summary:Increased credit availability facilitates land acquisition, but higher land values also hinder it. We investigate the impact of credit availability on land values, after regulatory changes in the lending system. We build an index of increased credit availability using Federal Reserve and Federal Deposit Insurance Corporation data. County-level panel fixed effects estimations are performed controlling for land value determinants, credit availability, and county-level macroeconomic factors. We find that estimating the effects of credit availability separately masks its total effect. Results show a 0.1 change in the index for increased credit availability is associated with 1.64–1.96% increase in land values.
ISSN:1074-0708
2056-7405
DOI:10.1017/aae.2020.32