Are Expert Opinions Accurate? Panel Data Evidence from the Iowa Land Value Survey

Wendong Zhang, Sergio H. Lence and Todd Kuethe

Abstract

Opinion surveys are the dominant method to gauge U.S. farmland values. However, there lacks a systematic evaluation of how opinions are formulated and adjust over time. Using panel data of agricultural professionals from the Iowa Land Value Survey over 2005-2015, we investigate how surveyed experts update their farmland value estimates. We find that experts almost fully correct their prior “errors” in a single period. Expert’ opinions also incorporate most of the prevailing price innovations in one period. Our Bayesian estimation technique simultaneously addresses the unobservability and non-stationarity of prevailing farmland values, and the Nickell bias in short dynamic panels.

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