Hedonic price modeling of agricultural land valuation in Ukraine

A Popovych

doi:10.20534/ejems-16-1-58-61

Abstract

The article applies hedonic method to the pricing of agricultural land in Ukraine as an alternative to the existing practice of regulatory monetary valuation. Using data from the sale ads the study establishes the main driving factors of agricultural land prices.

Highlights

Rational use of land resources is impossible without establishing their true value normally considered being the market price
Empirical evidence suggests that agricultural land is often exchanged at prices that exceed the capacity of land to produce income [1; 2]
The use of the standard model of supply and demand is constrained by the assumption of homogeneity of land parcels which is violated by numerous characteristics that distinguish one plot from the other

Summary

Introduction

Rational use of land resources is impossible without establishing their true value normally considered being the market price. The size and selling price per area unit are negatively correlated because of the need of significant financial resources to purchase larger tracts of land while they require additional capital expenditures on machinery and equipment for production and processing, which limits the number of potential buyers in the market.

Results

Conclusion