Abstract
We examine capitalization of ethanol plant construction and capacity expansion into surrounding irrigated and nonirrigated farmland values using data on every land transaction in Kansas from 1995 to 2017 in a hedonic price model. We hypothesize that corn prices and thus land values are higher near ethanol plants. We further hypothesize that ethanol market expansion is capitalized into irrigated parcels to a greater extent than into nonirrigated parcels due to differences in water demand and precipitation. We estimate that an irrigated (nonirrigated) parcel within 50 km of an ethanol plant experiences an average price premium of 8.8% (6.3%) relative to more distant parcels.
Original language | English |
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Pages (from-to) | 563-579 |
Number of pages | 17 |
Journal | Journal of Agricultural and Resource Economics |
Volume | 47 |
Issue number | 3 |
DOIs | |
State | Published - Sep 2022 |
Bibliographical note
Publisher Copyright:© 2022 Colorado State University. All rights reserved.
Keywords
- aquifer
- biofuels
- hedonic
- renewable fuels
ASJC Scopus subject areas
- Animal Science and Zoology
- Agronomy and Crop Science
- Economics and Econometrics