| Registro completo |
| Provedor de dados: |
AgEcon
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| País: |
United States
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| Título: |
Determinants of Iowa Cropland Cash Rental Rates: Testing Ricardian Rent Theory
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| Autores: |
Du, Xiaodong
Hennessy, David A.
Edwards, William M.
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| Data: |
2008-01-14
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| Ano: |
2007
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| Palavras-chave: |
Bargaining
Basis
Ethanol
Land quality shadow price
Rate of adjustment
Spatial autocorrelation
Land Economics/Use
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| Resumo: |
Based on the Ricardian rent theory, this study employs the variable profit function to analyze the determinants of Iowa cropland cash rental rates using county-level panel data from 1987 to 2005. Accounting for spatial and temporal autocorrelations, responses of local cash rental rates to changes in output prices and other exogenous variables are estimated. We find that Iowa cash rental rates are largely determined by output/input prices, soil quality, relative location, and other county-specific factors. Cash rents go up by $79 for a $1 increase in corn price in the short run. The marginal value of cropland quality, as represented by row-crop corn suitability rating index, is about $1.05. Ethanol plants are not found to have a significant local effect on cash rental rates, impacting local rental markets mainly through the national futures price. Scale of the local livestock industry and adoption of genetically engineered crops have significant impacts on local cash rental rates. In addition, changes in crop output prices are found to have long-run effects on cash rental rates. The long-run change in cash rents is approximately $109-$114 for a $1 change in corn price and is reached in about four years. Our research may be viewed as a test of the Ricardian rent theory. We find limited support for the theory.
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| Tipo: |
Working or Discussion Paper
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| Idioma: |
Inglês
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| Identificador: |
28548
http://purl.umn.edu/7700
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| Editor: |
AgEcon Search
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| Relação: |
Iowa State University>Center for Agricultural and Rural Development>CARD Working Paper Series
CARD Working Paper 07-WP 454
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| Formato: |
60
application/pdf
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