The effects of sugarbeet production on Montana land prices

Abstract

This study quantifies the effects of sugarbeet production on irrigated land prices in Montana. The theoretical framework uses an hedonic regression model to determine the impact of land characteristics and sugarbeet prices on land prices. It is argued that sugarbeet price has a positive impact on land prices. It is also argued that soil quality, alternative crop prices, location of parcel, population density, and size of parcel affect land prices. The primary data used in this study were appraisals for individual land parcels gathered from a private agricultural lender. Ordinary Least Squares regressions were estimated to determine the impact on per acre land prices of sugarbeet prices and other characteristics of each parcel. Results are presented for two different model specifications using current and expected prices. The reported findings of the effects on irrigated land prices of quality adjusted price, parcel location, population density, and size confirm that these variables have a significant influence for the total population of observations studied.