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- Info
Farmland values at the urban fringe: An analysis of sale prices
| Author: |
Chicoine, David L. |
| Date: |
1981 |
| Periodical: |
Land Economics |
| Abstract: |
Several researchers have statistically explored the importance of various factors in determining urban land values or agricultural land values (e.g., Downing 1973; Richardson, Vipond, and Furbey 1974; Reiss and Kensil 1979; Jennings and Kletke 1977). Few empirical analyses, however, have concentrated on land values in urban fringe areas, where agricultural and urban forces interact and complicate the estimation and understanding of values. The rural-urban fringe generally includes those areas bordering central cities, surrounding close-in suburbs and noncontiguous nearby towns, and extending into the adjacent, open countryside. It is in these areas that urban demands for farmland are substantial; present and expected shifts from agricultural to urban uses are a major market phenomenon. Generally, the interaction of agricultural and urban market forces in fringe areas results in increased values accruing to farmland owners. But because of uncertainties of actual urban conversion and the usual intermix of land uses, conflicts often emerge. Property taxes become burdensome for profitable agricultural use. Tax burdens and benefits may become unbalanced, and agricultural investments are often prematurely foregone. Various forms of preferential assessment of agricultural lands and growth management policies have been discussed or adopted in many states and localities in response to public concern for fringe area land-use problems (Regional Science Research Institute 1976). The purpose of this paper is to explore the natural and man-made factors that affect the price of farmland in an urban fringe market, including factors not reported in previous studies. This is accomplished by the development and empirical estimation of a hedonic price model for an urban fringe farmland market near Chicago, Illinois. First, the model is presented with expectations about the impacts of land characteristics and institutional factors on urban fringe farmland prices. The study area and data are then briefly described, followed by the presentation of the model estimates. Finally, some implications are discussed. |
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