The impact of no‐till on agricultural land values in the United States Midwest

Abstract

AbstractThis study investigates the impact of no‐till practice on agricultural land values in the United States (US) Midwest. Two county‐level panel data sets—the agricultural census farmland value data and the Iowa Farmland Values Survey data—are separately merged with a novel satellite‐based data set on no‐till adoption rates to achieve the study objective. Based on linear fixed effect econometric models, recently developed “external‐instrument‐free” estimation procedures, and a number of robustness checks, we find that increasing no‐till adoption rates has a statistically significant positive effect on agricultural land values at the county level. Results from the empirical analysis support the notion that economic and environmental benefits from adopting soil conservation practices, such as no‐till, are likely capitalized into higher farmland values.