Peterson, Willis L.

English

Research Papers in Economics

Staff Papers Series
Staff Paper P87-10  April 1987
INTERNATIONAL  LAMD QUALITY  INDEXES
Willis Peterson
Department  of Agricultural and Applied Economics
University  of Minnesota
Institute of Agriculture,  Forestry and Home Economics
St. Paul, Minnesota 55108Staff Paper P87-10  April 1987
INTERNATIONAL LAND QUALITY INDEXES
Willis Peterson
Staff Papers are published without formal review within the
Department of Agricultural and Applied Economics.
The University of Minnesota is  committed to  the policy that
all persons shall have equal access  to  its  programs, facilities
and employment without regard to  race, religion, color,  sex,
national origin, handicap, age,  or veteran status.April,  1987
International Land Quality Indexes
Willis Peterson
In a recent article a cross-section (state  level)  land quality index
was constructed for the U.S.  (Peterson).  The special  feature of this
index as opposed to  one constructed from raw land prices was  the removal
of the affect of differences  in population densities among states  on land
values.
For a variety of reasons  it would be useful to have  a similar  index  for
individual countries  in an international context.  A comparison of  land
productivity among nations  is not particularly meaningful unless
differences in land quality is  taken into  account.  Also for econometric
purposes, the use of a land variable unadjusted for quality causes biased
estimates of the coefficients to  the extent that the measurement error  is
correlated with the variables in the regression.
Unfortunately data on land prices  are not available for many countries;
in some countries, mainly the centrally planned economies,  land prlcres  do
*not even exist.  However, applying the land quality weights derived in  the
above mentioned article to international data should provide an index of
land quality that, although not perfect, is better than using a simple
area measure of land.  The U.S. land market is  open and competitive.
Hence U.S.  land prices should be a reasonably accurate measure of quality
after accounting for nonagricultural uses.
The purpose of this  note is  to  construct international  land quality
indexes  for 1. all agricultural land, and 2. crop land, for  126  countries
using the weights presented in the  earlier article.In the  earlier article  the reduced form equation explaining  state
differences in per  acre land values  (excluding buildings) holding
population density constant is:
(1)  LPV - .0077 * PNICL +  .0133 * PIL +  .4161 * LP +  .3325 * LN
where:  LPV - log of the predicted per  acre value of agricultural
land
PNICL - nonirrigated crop land  in each  state as  a percent of
all crop land plus  land in farms  designated as
permanent pasture.
PIL - irrigated land as a percent of all cropland in  farms
LP - log of long run average annual precipitation
LN - log of soil nitrogen
Data to construct the first three  independent variables for individual
variables for  individual countries ar'-  readily available.  Although soil
nitrogen data for  individual countries  is not available, this  variable
explained only  3.7 percent of the variation  in land prices  among states  in
the U.S.  Therefore its omission from the weights should not introduce a
large error in the  international land quality measures.
Following the same procedure of the earlier paper, the LPV for each
country given by equation  (1) (LN omitted)  is computed.  The  resulting
land quality index for all  agricultural land shown in column  (1) of Table
1 is obtained by taking the anti-log of LPV,  dividing by  its  126  country
average value, and multiplying by 100.  The land quality index  for crop
2land shown in column (2)  of Table  is computed in a similar manner except
PNICL is omitted.
The resulting land quality indexes  reveal substantial differences among
countries.  According to  these  figures Surinam has  the highest  quality
agricultural land  in the world followed by Japan.  Generally the  rice
producing countries exhibit high quality  land because  of high rainfall and
a relatively large share of land under irrigation.  The extensive grazing
countries of Africa exhibit relatively low land quality  indexes because of
low rainfall, a small share of land in crops, and a small share of
cropland that  is  irrigated.  The United States exhibits somewhat below
average land quality in both the  all land and crop land categories.
Table 1.  International Land Quality Indexes
(Sample average - 100)
all  crop  all  crop
Country  land  land  Country  land  land
Algeria  38  47  Syria  50  53
Angola  65  85  Thailand  164  124
Benin  119  92  Albania  159  185
Botswana  43  60  Austria  96  66
Burkina Faso  64  78  Belgium-Lux.  81  75
Burundi  97  88  Bulgaria  97  95
Cameroon  109  109  Cyprus  100  86
CAR  92  96  Czechoslovakia  86  70
Chad  48  65  Denmark  114  88
Congo  75  101  Finland  98  69
Egypt  68  96  France  86  79
3Ethiopia  62  74  E. Germany  98  77
Gabon  84  112  W. Germany  86  77
Gambia  126  121  Greece  87  96
Ghana  90  91  Hungary  90  70
Guinea  110  120  Iceland  54  77
IV. Coast  112  104  Ireland  67  84
Kenya  69  74  Italy  102  96
Lesotho  55  71  Malta  99  69
Liberia  102  91  Netherlands  124  153
Madagascar  88  119  Norway  114  87
Malawi  90  84  Poland  92  72
Mali  50  69  Portugal  125  102
Mauritania  27  38  Romania  98  92
Mauritius  145  112  Spain  90  83
Morocco  53  57  Sweden  87  67
Mozambique  62  83  Switzerland  77  94
Niger  45  52  Turkey  89  74
Nigeria  112  100  U.K.  78  84
Rwanda  123  103  USSR  55  65
Senegal  73  72  Yugoslavia  82  77
Sierra Leone  127  128  Barbados  128  91
Somalia  35  49  Canada  79  68
S. Africa  56  72  Costa Rica  93  111
Sudan  60  75  Cuba  125  131
Swaziland  95  126  Dominican Rep.  104  112
Tanzania  66  86  El  Salvadore  129  128
4Togo  125  91  Guatemala  122  115
Tunisia  57  51  Haiti  115  104
Uganda  98  92  Honduras  104  114
Zaire  99  103  Jamaica  93  90
Zambia  47  60  Mexico  82  100
Zimbabwe  83  91  Nicaragua  93  114
Afganistan  57  73  Panama  116  130
Bangladesh  190  150  Trinidad-Tob.  148.  113
Burma  214  156  U.S.  83  87
China  (PRC)  115  146  Argentina  55  68
Hong Kong  202  187  Bolivia  61  80
India  166  136  Brazil  90  102
Iran  50  63  Chile  50  59
Iraq  57  59  Colombia  73  92
Israel  87  108  Ecuador  94  106
Japan  224  252  Guyana  143  172
Jordan  67  55  Paraguay  74  96
N. Korea  182  173  Peru  83  111
S. Korea  182  135  Surinam  249  300
Malaysia  193  135  Uruguay  66  87
Nepal  153  109  Venezuela  77  97
Pakistan  99  118  Australia  54  72
Philippines  178  136  Fiji  175  135
Saudi Arabia  32  45  Indonesia  179  180
Singapore  181  119  New Zealand  117  165
Sri Lanka  179  158  Papua N. Guinea 167  130
5'FOOTNOTES
*  Professor, Department of Agricultural and Applied Economics, University
of Minnesota, St. Paul.
1Data on nonirrigated cropland as a percent of all  land, and irrigated
land as a percent of crop land were obtained from the United Nations, FAO,
Production Yearbook 1984.  The percentages are for 1981.  Long run average
precipitation was obtained by averaging the figures from all reporting
stations in the country as given in the British Air Ministry
Meteorological Office, Tables of Tmper.  !tur!e,  Relative Humidity, and
Precipitation for  the World.
6REFERENCES
British, Air Ministry Meteorological Office, Tables  of Tempei-ture,
Relative Humidity, and Precipitation  for  the World.  London:  Her
Majesty's Stationary Office, 1958.
Peterson, Willis,  "Land Quality and Prices,"  American Journal  of
Agricultural Economics 68(1986):812-19.
United Nations Food and Agriculture Organization, Production Yearbook,
Rome, 1984.
7

INTERNATIONAL LAND QUALITY INDEXES

Abstract

Similar works

Full text

Available Versions

Research Papers in Economics