MEASURING THE CONTRIBUTIONS OF SITE CHARACTERISTICS TO THE VALUE OF AGRICULTURAL LAND

This study examines the effects of different combinations and qualitie s of selected site characteristics on the value of agricultural land i n six substate regions in Washington State. The analysis follows the g eneral hedonic regression form, but incorporates nonnegativity constra ints on the models. This, coupled with an adaptation of Bierens's cond itional moment test, yields consistent results showing (a) land value is a function of site characteristics, (b) land markets in Washington State are highly regional, (c) parsimonious empirical models can provi de adequate representations of expected land values, and (d) nonnegati ve truncation is a valuable procedure in hedonic models.