AGRICULTURAL ECONOMICS 422

1
AGRICULTURAL ECONOMICS 422

• Land Economics

Lecture 4
2
Land Markets

• Interaction of supply and demand
• vary directly with demand
• inversely with supply
• Shifts in schedules
• Buyers bid up prices
• Supply expands
• more intensive use
• new development
• lesser capacity land used

3
Management Implications

• Highest use capacities used first
• Lesser use capacities come on line next
• More intensive use of existing sites (ie use of
  more capital per site)
• New development

4
Influence Affecting Supplies - Technology

• Technology
• Computers (space per worker)
• Hybrid grains (less cropland)
• Air conditioning in the south

5
Influence Affecting Supplies - Institutions

• Property rights
• Externalities
• Common property
• Lake Conroe grass carp
• USFS
• Homestead
• Bureau of Reclamation 160 acre rule

6
Fixed Location Factor

• Mobile resource commands a return
• Fixed resource takes the remainder
• Location limits options (Mustang example)

7
Economics of Location

• Soil capacities
• Transportation costs

8
Implications of Fixity

• More intensive use of land near markets
• Conforms to private ownership
• Subjects land use to community conditions
• high property tax (suffer or prosper)