Farm Buildings and Farmland: An Analysis of Capital Formation

摘要

The study (1) defines the nature and scope of the problem concerning the measurement of farm building values, (2) develops a simple theoretical model of the markets for land and buildings, and (3) examines three alternative measures for the relative U.S. stock value of farmland and farm buildings. Each of the three alternative measures is demonstrated to be an effective procedure for annually measuring farm building values. A model of the firm is presented in a neoclassical, nonstochastic, dynamic partial equilibrium setting. The dynamic model is an effective tool for defining the relationship between two fundamentally different inputs: land and buildings. The three procedures for measuring the value of farm buildings are: (1) an annual survey based on respondent opinions, (2) an econometric procedure that uses farm transaction data, and (3) a theoretical approach that relates adjustments in building value to changes in the rate of inflation.