Effects of inflation and interest rates on land pricing.

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dc.contributor.author Harmon, Jacob
dc.date.accessioned 2011-06-16T18:08:40Z
dc.date.available 2011-06-16T18:08:40Z
dc.date.issued 2011-06-16
dc.identifier.uri http://hdl.handle.net/2097/9256
dc.description.abstract Land is typically the highest value category of assets that farmers and ranchers have on their balance sheets. The value of land is affected by inflation. Understanding the effect of inflation on the land market helps farmers make better land pricing decisions and better asset management decisions. Using Treasury Bills and Farm Credit Bonds, future inflation expectations and agricultural risk premiums can be estimated. With the recent government stimulation of the economy and the resulting large amount of money infused into the economy, inflation is becoming an increasing concern with investors. Economic theory suggests that this infusion of money will affect future interest rates and ultimately the value of land given the inverse relationship between interest rates and the value of land. These lingering affects occur with the rise and fall of yield rates for Treasury Bills and Farm Credit bonds. Farm Credit bonds are sold at a premium over Treasury Bills. This premium indicates the market-assessed additional risk that farmers have to pay for their operating loans and other mortgages. Even though land values are affected by inflation, other things affect land values such as recreational use, development, and natural resource exploration. A combination of inflation and these other affects can greatly affect land prices. en_US
dc.language.iso en_US en_US
dc.publisher Kansas State University en
dc.subject Farmland en_US
dc.subject Interest Rates en_US
dc.subject TIPS - Treasury Inflation Protected Securities en_US
dc.subject Inflation en_US
dc.subject Farm Credit Bonds en_US
dc.title Effects of inflation and interest rates on land pricing. en_US
dc.type Thesis en_US
dc.description.degree Master of Agribusiness en_US
dc.description.level Masters en_US
dc.description.department Department of Agricultural Economics en_US
dc.description.advisor Allen M. Featherstone en_US
dc.subject.umi Agriculture, General (0473) en_US
dc.subject.umi Business (0310) en_US
dc.subject.umi Economics (0501) en_US
dc.date.published 2011 en_US
dc.date.graduationmonth August en_US

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