Land Value Impacts of Ethanol Market Expansion by Irrigation Status

Grant Gardner, Gabriel S. Sampson

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

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 languageEnglish
Pages (from-to)563-579
Number of pages17
JournalJournal of Agricultural and Resource Economics
Volume47
Issue number3
DOIs
StatePublished - 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

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