Urban Sprawl and Farmland Prices
Posted: 4 Nov 2005
Date Written: October 10, 2005
This article develops a theoretical model of farmland valuation that explicitly accounts for three effects of urban sprawl: conversion of farmland to urban uses, effect on agricultural returns, and speculative effect as represented by the probability of farmland conversion. This model is estimated using county level data in the continental United States. Evidence is found for all three effects of urban sprawl on farmland values. Counties more accessible to major urban centers have higher net agricultural returns. Subsidiary evidence supports that the latter effect may be attributed to survival of (or conversion to) high-valued agriculture around urban centers.
Keywords: hedonic determinants, land prices, spatial productivity, urban sprawl
JEL Classification: R14, Q15, D24, C33
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