The impact of natural amenity on farmland values: A quantile regression approach

• Published in: Land use policy 2013-07, Vol.33, p.151-160
• Main Authors: Uematsu, Hiroki, Khanal, Aditya R., Mishra, Ashok K.
• Format: Article
• Language: English
• Subjects: agricultural land; Animal, plant and microbial ecology; Applied ecology; Biological and medical sciences; Conservation reserve payments; Direct and indirect farm payments; Environment; environmental factors; Farmland values; Farms; Fundamental and applied biological sciences. Psychology; issues and policy; Land; land retirement; Natural amenity; Payment; Prices; Production; Quantile regression; regression analysis; Retirement; United States
• ISSN: 0264-8377; 1873-5754
• DOI: 10.1016/j.landusepol.2012.12.007

► In contrast to previous studies that assume a homogeneous relationship across the population, quantile regression is used to estimate the empirical model. ► Natural amenity is positively correlated with farmland values and its impact is often more pronounced at higher price range of farmland. ► On the other hand, land retirement programs like CRP and WLP have positive impact on farmland values but, at the lower quantiles. Farmland values are influenced not only by agricultural production but also by several other economic and environmental factors. Among the attributes that contribute value to farmland are certain amenity characteristics. Using farm-level data this study examines the impact of natural amenity on farmland values in the United States. In contrast to previous studies that assume a homogeneous relationship across the entire distribution of farmland values, this study uses quantile regression to estimate the empirical model. Our quantile regression analysis offers some insightful results. Natural amenity is positively correlated with farmland values and its impact is often more pronounced at higher price range of farmland. On the other hand, land retirement programs like CRP and WLP have positive impacts on farmland values but, at the lower quantiles. Direct farm payments have a significantly positive effect on farmland values and the impact increases monotonically across quantiles. Finally, policy implications are discussed.