Identifying the Extent of the Urban Fringe and Its Impact on Agricultural Land Values

Benoît A. Delbecq, Todd H. Kuethe and Allison M. Borchers

Abstract

This study presents an empirical model of the impacts of agricultural and urban returns on farmland value. The model allows the marginal impacts of parcel characteristics to vary nonlinearly over space with an endogenous smooth transition between urban fringe and rural areas. The estimation examines 10,317 parcel-level farmland transactions across the state of Illinois over the period January 2001–December 2009. The results suggest that marginal impacts of both agricultural and urban returns differ between urban fringe and rural areas. (JEL Q15, R14)

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