Wednesday,  October 18, 2017

Articles

Volume 66 (2017), Number 3: 188-201

Estimating Location Values of Agricultural Land

Georg Helbing, Zhiwei Shen, Martin Odening and Matthias Ritter

“Bodenrichtwerte” reflect the average location value of land plots within a specific area. They constitute an important source of information that contributes to price transparency on land markets. In Germany, “Bodenrichtwerte” are provided by publicly appointed expert groups (Gutachterausschüsse). Using empirical data from Mecklenburg-Western Pomerania between 2013 and 2015, this article examines the relation between “Bodenrichtwerten” and statistically determined location values. It turns out that “Bodenrichtwerte” tend to underestimate location values of arable land by 11.5% on average. This underestimation can be traced back to the pronounced increase of land prices in the observation period. As an alternative to the expert-based determination of location values, we suggest a nonparametric smoothing procedure that rests on the Propagation-Separation Approach. The application of this data-driven procedure achieves an accuracy comparable to that of official “Bodenrichtwerte” at the one-year ahead prediction of location values without the requirement of expert knowledge.

“Bodenrichtwerte” reflect the average location value of land plots within a specific area. They constitute an important source of information that contributes to price transparency on land markets. In Germany, “Bodenrichtwerte” are provided by publicly appointed expert groups (Gutachterausschüsse). Using empirical data from Mecklenburg-Western Pomerania between 2013 and 2015, this

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Contact author:
GEORG HELBING
Humboldt-Universität zu Berlin
Faculty of Life Sciences
Department of Agricultural Economics
Unter den Linden 6, 10099 Berlin
e-mail: georg.helbing@agrar.hu-berlin.de


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