A REPRESENTATIVE MARKET MODEL OF FARMLAND BID PRICES

A land bid-price model is formulated which integrates asset pricing models form prior studies to illustrate the singular and joint effects of ordinary and capital gains taxes, growth of returns, diseconomies of size, and risk behavior on farmland prices. An application of the model to primary data from cash grains farms illustrates that the ceteris paribus effect of increased marginal tax rates on a perpetual, growing income stream is to increase its present value. Larger farms in higher marginal tax brackets are shown to have a competitive advantage over smaller, lower tax bracket farms.


Issue Date:
1982-12
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/32271
Published in:
Western Journal of Agricultural Economics, Volume 07, Number 2
Page range:
279-292
Total Pages:
14




 Record created 2017-04-01, last modified 2017-04-27

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