Abstract

This paper estimates a hedonic price model in order to identify the key determinants that explain agricultural land value during the period 1978 to 1998. Results show that: (1) the price of agricultural land is positively affected by; the existence of constructions on the property, the percentage of tech irrigation systems and fruit orchards on the farm, (2) the distance between the farm and urban centers adversely affects the value of agricultural land, (3) the increase in farmland values during the period can be explained in part by the profitability of agriculture, improvements in road infrastructure and the higher level of transportation technology that has been achieved over time, (4) The profitability of agriculture has a positive effect on farmland values, (5) inflation was not significant. Finally, the results of this study are consistent with the results reported in the literature for Chile and other countries.