Research

Job Market Paper

Farmland Market Dynamics and Landowners' Valuation: Evidence from the Global Financial Crisis

During the 2007-2008 financial crisis, farmland emerged as a relatively safe haven for investors, not experiencing the turbulence observed in traditional financial markets. This study investigates the evolution of sellers’ and buyers’ valuations of farmland and the impact of those valuations on farmland market dynamics from 1996 to 2021 in Iowa. I develop a seller-to-buyer ratio, which measures the extent to which sellers overvalue or undervalue their farmland assets compared to buyers. The findings indicate that, in the post-crisis era, sellers tend to overvalue the productive potential of farmland and underestimate the opportunity costs associated with farmland investment. Furthermore, landowners have become more sensitive to the risk of farmland's exposure to stock market volatility. These insights highlight a critical factor contributing to the current scarcity of farmland available for sale: a deliberate choice by landowners to retain their properties within their portfolios. This behavioral shift, along with the rise in non-operator ownership, has significant implications for policies concerning farmland access for farmers and the structuring of tax incentives for landowners.

Working Papers and Work in Progress

Choi, J. and M. Jodlowski. "Do good intentions make good policy? Insecure tenure status in South Korea." Submitted to Land Economics

In developed agricultural economies, thin farmland markets and high prices are typical barriers to farmland access. In South Korea, however, access is also hindered by regulations prohibiting non-operator land ownership, resulting in widespread tenure insecurity and nominally illegal rental arrangements. This paper presents a conceptual theory that explains the prevalence of such a system by examining the incentive structure of the non-operator owners, who compensate illegal tenants for the risk they face with lower rental rates. Our empirical analysis first examines the extent of illegal farmland rental contracts from 2013 to 2017 using an exogenous policy shock and two linked panel data sets: the Farm Household Economy Survey and the Agricultural Production Cost Survey. We identify 41% of rice farmers in our sample who have a high likelihood of illegal tenure status. Further empirical results quantify both the trade-offs between less-than-legal landlords and tenants over direct government payments and rent, as well as the overall instability of tenure status resulting from short-term contracts. 

Choi, J. and M. Jodlowski. “Tenure status and land investment in South Korea.”

Choi, J. and M. Jodlowski.  “Data matters: Comparing two farmland transaction datasets in Iowa.”

Future Works

In the near future, I intend to expand my research area into the interactions between land markets and environmental conservation programs, alongside my ongoing work on farmland regulations and markets.