Influence of physical attributes on the price of land: the case of the Province of Talca, Chile

Abstract

J.L. Troncoso, M. Aguirre, P. Manríquez, V. Labarra, and Y. Ormazábal. 2010. The influence of physical attributes on the price of land: the case of the province of Talca, Chile. Cien. Inv. Agr. 37(3): 105-112.This study aims at estimating the percent impact on the price of farmland of the following physical attributes: size, soil quality, water rights, connectivity and location. To this effect, all the farm sales occurred in the province of Talca between 2003 and 2006 were examined, directly from the corresponding title deeds, at the Conservador de Bienes Raíces (Property Register) of Talca, obtaining thus a total of 92 observations. Subsequently, a linear function was estimated, with price per hectare as the dependent variable and the physical attributes listed above, as explanatory variables. Analysis showed that the most influential variable is location (i.e. county) and in a very minor degree, connectivity (i.e. distance to the nearest paved road), water rights, soil quality and size. Talca is the preferred county, as location in other counties has negative impacts on price. Size and connectivity have negative impacts, while water rights and soil quality have positive impacts on price.

Determinants of agricultural land values in Argentina

“…This result is in line with, for instance, Gardner and Barrows (1985), Maddison (2000), Maddison (2009), Troncoso et al (2010, and Yoo et al (2013).…”

“…Existing studies using comparable proxies for land quality find similar results (e.g. Troncoso et al, 2010;Nivens et al, 2002;Maddison, 2000 ;Faux and Perry, 1999). …”

“…The former includes structural characteristics such as surface (e.g. in Chicoine, 1981;Donoso and Vicente, 2001;Gardner and Barrows, 1985;Huang et al, 2006;Maddison, 2009Maddison, , 2000Troncoso et al, 2010, among others), soil characteristics (e.g. in Ay et al, 2012;Donoso and Vicente, 2001;Huang et al, 2006;Maddison, 2009Maddison, , 2000Miranowski and Hammes, 1984;Troncoso et al, 2010, etc.…”

“…), productivity (Chicoine, 1981;Gardner and Barrows, 1985;Maddison, 2000;Wasson et al, 2013), and yield. Extrinsic characteristics include locational characteristics such as access to the nearest city (Ay et al, 2012;Maddison, 2009Maddison, , 2000Sklenicka et al, 2013), access to roads (Nivens et al, 2002;Troncoso et al, 2010), urban pressure (Herriges et al, 1992;Huang et al, 2006;Maddison, 2000;Sklenicka et al, 2013;Taylor and Brester, 2005), and climate (Maddison, 2000).…”

“…Ay et al, 2012;Chicoine, 1981;Donoso and Vicente, 2001;Gardner and Barrows, 1985;Maddison, 2009;Miranowski and Hammes, 1984;Palmquist and Danielson, 1989;Troncoso et al, 2010). In order to determine the best functional form, the Box-Cox estimation is used in some studies (Ma and Swinton, 2012;Maddison, 2000;Miranowski and Hammes, 1984;Nivens et al, 2002;Palmquist and Danielson, 1989).…”