Factors influencing Kansas agricultural farm land values

Land transactions typically involve a substantial investment of time and money for parties involved in the sale. Because of the size of the investment and infrequency of purchases/sales, significant personal interaction between buyer and seller often results. In this study, farmland sales in 104 of 105 Kansas counties from 1986-2000 were examined to quantify the influence of personal relationships and changes over time. Transactions between related parties resulted in a 43% discount on the per acre sales price. Results indicated that social capital effects have increased over time, with the discount on sales between related parties growing 2% per year.