Bargaining and market power in a GIS-based hedonic pricing model of the agricultural land market

Agricultural land markets differ greatly from the textbook-case of perfect competition. This is why standard hedonic pricing techniques should be revised before applying this technique to this market. The objective of this paper is to determine (a) the deviation from the competitive market price of agricultural land in the Netherlands due to market power and the existence of an excess surplus and (b) the effect of bargaining power on the division of excess surplus between the eventual seller and the buyer in the market for agricultural land.Land Economics/Use,

Hobby Farms and Protection of Farmland in British Columbia

Agricultural land protection near the urban-rural fringe is a goal of many jurisdictions, and none more so than British Columbia, Canada, which uses a provincial-wide zoning scheme to prevent subdivisions and non-agricultural uses of the land. A preferential tax regulation scheme for farmers is also in place, as in many jurisdictions. Small scale hobby farmers are present at the urban fringe near Victoria (the capital) both on land inside and outside of the Agricultural Land Reserve (ALR). The goal of this paper is to investigate whether or not the establishment of hobby farms creates problems for agricultural land preservation. We make use of a GIS (geographic information system) to construct detailed spatial variables and we employ two models to analyse our parcel-level data set: an hedonic pricing model and a limited dependent variable model. The conclusions drawn from the results in this paper would likely apply to other jurisdictions which seek to protect agricultural land in the urban fringe.Hobby farmers, Agricultural Land Reserve, Geographical Information System, urban-rural fringe,zoning systems, farmland fragmentation

Farmland Conservation in The Netherlands and British Columbia, Canada: A Comparative Analysis Using GIS-based Hedonic Pricing Models

As a result of urban development farmland in many countries is under pressure. Reasons to preserve farmland are related to cultural heritage, food safety, open space, the environment, but also slowing and restricting development is a reason. To protect farmland countries use different land use policies. This paper will look specifically at two jurisdictions: The Netherlands and a particularly rich farming area in British Columbia, Canada. For these areas we will investigate how the institutions and laws present in these jurisdictions contribute to agricultural land preservation. We will analyse farmland values in a GIS-based hedonic pricing framework to answer this question. This combination enables us to analyse direct impacts of laws and regulations within the hedonic pricing framework. Moreover, we can use farm values to analyse farm survivability, and the level of speculation on farmland in the urban-rural fringe, where farmland is under urban pressure.Hedonic pricing models, zoning policies, Geographical Information System, agricultural land values at the urban fringe

A Spatial Bayesian Hedonic Pricing Model of Farmland Values

In 1973, British Columbia created the Agricultural Land Reserve (ALR) to protect farmland from development. This study investigates whether the ALR has been effective near the city of Victoria. Therefore, we employ a GIS-based hedonic pricing model and quantify ALR specific measures. Bayesian Model Averaging in combination with Markov Chain Monte Carlo Model Composition are used to address specification uncertainty. Results show that zoning schemes are partly credible. Zoned farmland sells for lower prices than other farmland. However, farmland located closer to the city of Victoria is priced higher and hobby farmers pay higher prices than conventional farmers.Farmland prices, Bayesian Model Averaging, Hedonic pricing., Land Economics/Use,

EXPERT OPINION VERSUS TRANSACTION EVIDENCE: USING THE REILLY INDEX TO MEASURE OPEN SPACE PREMIUMS IN THE URBAN-RURAL FRINGE

Due to economic and population growth farmland and to a lesser extend other undeveloped areas are under pressure in the urban-rural fringe in British Columbia, Canada. The objectives of this paper are to determine if residential property values near Victoria, BC include open-space premiums for farmland or parks or both, and to determine if using assessed values instead of market prices of the property result in the same findings. We estimate a SUR (Seemingly Unrelated Regression) model with two hedonic pricing equations, one with actual market values as the dependent variable and one with assessed property values, and compare the resulting estimates of shadow prices for open space amenities. Furthermore, we take account of spatial autocorrelation and combine Method of Moment estimates of the spatial parameters in both equations.Hedonic pricing models, Assessed property values, Value of open space, Geographical Information System, Reilly, GMM, Spatial dependence, Community/Rural/Urban Development, Land Economics/Use, Research Methods/ Statistical Methods,

Bayesian Model Averaging in the Context of Spatial Hedonic Pricing: An Application to Farmland Values

Since 1973, British Columbia created an Agricultural Land Reserve to protect farmland from development. In this study, we employ GIS-based hedonic pricing models of farmland values to examine factors that affect farmland prices. We take spatial lag and error dependence into explicit account. However, the use of spatial econometric techniques in hedonic pricing models is problematic because there is uncertainty with respect to the choice of the explanatory variables and the spatial weighting matrix. Bayesian model averaging techniques in combination with Markov Chain Monte Carlo Model Composition are used to allow for both types of model uncertainty.Bayesian model averaging, Markov Chain Monte Carlo Model Composition, spatial econometrics, hedonic pricing, GIS, urban-rural fringe, farmland fragmentation

The future of the Dutch egg processing industry

This research examines the competitiveness of the Dutch egg products industry, as well as the consequences of tightening up the laws concerning layer poultry on the competitive position of the Dutch egg production industry. A tightening of the laws has, in fact, the effect of raising the production cost, and in this research the central question revolves around whether animal welfare-friendly egg products are perceived as products with added value by the buyers of egg products (mainly industrial buyers) and will thus also be offered for sale at a higher price. Furthermore, it will be investigated what the probable developmental directions are in the egg products industry if this higher price cannot be realised.Livestock Production/Industries,

Expert Opinion versus Transaction Evidence: Using the Reilly Index to Measure Open Space premiums in the Urban-Rural Fringe

Due to economic and population growth farmland and to a lesser extend other undeveloped areas are under pressure in the urban-rural fringe in British Columbia, Canada. The objectives of this paper are to determine if residential property values near Victoria, BC include open-space premiums for farmland, parks or golf courses, and to determine if using assessed values instead of market prices of the property result in the same findings. We estimate a Seemingly Unrelated Regression (SUR) model with two hedonic pricing equations, one with actual market values as the dependent variable and one with assessed property values, and compare the resulting estimates of shadow prices for open space amenities. Furthermore, we take account of spatial autocorrelation and combine Method of Moment estimates of the spatial parameters in both equations.Hedonic pricing models, spatial dependence, assessed property values, open space.

Hobby Farms and British Columbia’s Agricultural Land Reserve

Agricultural land protection near the urban-rural fringe is a goal of many jurisdictions, including British Columbia, Canada, which uses a provincial-wide zoning scheme to prevent subdivisions and non-agricultural uses of the land. Preferential taxes are also used to encourage agricultural use of the land. Small scale hobby farmers are present at the urban fringe near Victoria (the capital), both inside and outside of the Agricultural Land Reserve (ALR). The goal of this paper is to investigate whether hobby farms create problems for agricultural land preservation. We make use of a GIS (geographic information system) model to construct detailed spatial variables and analyse our parcel-level data set using an hedonic pricing model and a limited dependent variable model. The results show that hobby farmers tend to select small parcels that are near open space and relatively close to the city and they tend to support horses and other livestock. In terms of price, farmland is worth more per ha the smaller the parcel is and the closer it is to the city. In general farmland is worth more when it is less fragmented but this appears to be reversed for hobby farms – indicating that hobby farmers may be better adapted to surviving in the urban fringe than conventional farmers. The conclusions drawn from the results in this paper would likely apply to other jurisdictions which seek to protect agricultural land in the urban fringe.Hobby farmers, Agricultural Land Reserve, Geographical Information System, urban-rural fringe, zoning systems, farmland fragmentation

Bargaining and market power in a GIS-based hedonic pricing model of the agricultural land market

Agricultural land markets differ greatly from the textbook-case of perfect competition. This is why standard hedonic pricing techniques should be revised before applying this technique to this market. The objective of this paper is to determine (a) the deviation from the competitive market price of agricultural land in the Netherlands due to market power and the existence of an excess surplus and (b) the effect of bargaining power on the division of excess surplus between the eventual seller and the buyer in the market for agricultural land