Abstract
Four models of price formation, incorporating search and bargaining concepts, were specified for an Australian farm land market. The models were estimated using primary data obtained from land buyers. A sequential, four-equation model of buyer/seller behavior was selected as conceptually superior. Substantively, final prices were closer to buyers' bid prices than sellers' offer prices; buyers valued soil conservation and proximity to town more highly, and property productivity and size less highly, than the sellers; and market information had a positive influence on price. In this area, education may be preferable to subsidies for achieving soil conservation.
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