Next year on the US farmland market: an informational approach

Abstract

This study formulates an information measure for changes in asset values and applies the formulation to farmland values in the United States for 1960 to 1999. The results indicate that changes in asset values contained significant information following the Russian wheat sale in the early 1970s and the financial crisis in agriculture in the mid 1980s. Further, information about preceding year's asset values largely explains the regional distribution of current year's farmland values.

Notes

¹ The regions used in this study are the 10 farm production regions used by the Economic Research Service. The 10 regions include the Northeast (Connecticut, Delaware, Maine, Massachusetts, Maryland, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont), the Lake States (Michigan, Minnesota and Wisconsin), the Corn Belt (Illinois, Indiana, Iowa, Missouri and Ohio), the Northern Plains (Kansas, Nebraska, North Dakota and South Dakota), Appalachia (Kentucky, North Carolina, Tennessee, Virginia and West Virginia), the Southeast (Alabama, Florida, Georgia and South Carolina), the Delta (Arkansas, Louisiana and Mississippi), the Southern Plains (Oklahoma and Texas), the Mountain States (Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah and Wyoming) and the Pacific States (California, Oregon and Washington). In addition, while Alaska and Hawaii are not typically used because of idiosyncratic factors, we include these states as a separate region.