The Impacts of Non-local Buyers on Farmland Market in Alabama

Previous studies show that non-local buyers typically pay a price premium for farmland but most adopt a simple dummy variable to measure buyers’ non-locality, which neglects the heterogeneity among non-local buyers. Utilizing a parcel-level farmland transaction dataset, we construct a distance-based variable to measure buyers’ non-locality, using multiple regression to investigate their impacts on farmland market. Our results indicate that an additional 1% buyer-toparcel distance can lead to farmland price increase by 4.3%, suggesting that buyers located farther away typically pay more for land. It is probably because they face greater asymmetric information and possess more limited local market knowledge.