Journal of Korean Society of Rural Planning (농촌계획)

Korean Society of Rural Planning (한국농촌계획학회)
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A Study on Building a Farmland Price Index

농지시장 추세 파악을 위한 가격지수 개발

  • Han, Donggeun (Dept. of Agricultural Economics, Gyeongsang National University) ;
  • Yi, Hyangmi (Rural Research Institute, Korea Rural Community Corporation) ;
  • Kim, Taeyoung (Dept. of Food and Resource Economics, Gyeongsang National University (Inst. of Agri. & Life Sci.)) ;
  • Kim Yun-shik (Dept. of Food and Resource Economics, Gyeongsang National University (Inst. of Agri. & Life Sci.))
  • 한동근 (경상국립대학교 농업경제학과) ;
  • 이향미 (한국농어촌공사 농어촌연구원) ;
  • 김태영 (경상국립대학교 식품자원경제학과 (농업생명과학연구원)) ;
  • 김윤식 (경상국립대학교 식품자원경제학과 (농업생명과학연구원))
  • Received : 2022.11.09
  • Accepted : 2022.11.25
  • Published : 2022.11.30
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Abstract

The change in farmland price has almost always been focused on not only farmers but policy-decision makers; for farmers to get information before purchasing farmland; for policy-decision makers to use appropriate policy tools to stabilize the market. So far the change in farmland price has been calculated as a form of average change on a year-to-year base. Such calculations have become one of the causes which lead to misunderstanding of the farmland market because the year-to-year average change includes changes in price as well as changes in the number of trades and sizes of traded farmland. This paper is designed to suggest a proper method of building a price index for farmland as a tool to review the price change. We considered the applicability of several types of price indices and concluded that a Laspeyres-type price index is the most reasonable choice. A Laspeyres-type price index, however, has a shortcoming in which a reference year's weight may affect the whole period of an index. Thus, we also suggest two other weights, a three-year average including a reference year and a share of farmland. All indices show that farmland prices have risen significantly in recent 10 years. We hope that the indices will be developed into one of the government's formal statistics.

Keywords

Acknowledgement

이 연구는 2021년 한국농어촌공사 농어촌연구원의 기본 연구로 수행된 것임(과제명 : 농지시장 변화 모니터링 체계 구축과 농지은행 성과분석)

References

  1. Cho, Y., K. 2002. "Making Price Index with Variable Weights," Quarterly National Account Review 2002(3): 19-60. Bank of Korea.
  2. Kwon, O. S., 2008. "Regional Patterns of Farmland Price Changes" The Korean Journal of Agricultural Economics 49(3): 53-76
  3. Lee., Y. H., 2020, "Functions and Roles of Farmland Bank," Rural Community and Environment 147(Summer): 52-63.
  4. Lee., Y. M., 2021. "Some Issues on Farmland Price Indices," Presented in the Seminar at Rural Research Institute.
  5. Lim, S. Y., 2011, "A Method of Price Index by Geometric Average," Quarterly National Account Review 2011(3): 54-70. Bank of Korea.
  6. Woo, B. J., Lee, S., Seo., S. T. and Kang, H. J, 2017, In-Dept Appraisal Report of Farmland Bank Project. Korea Rural Economic Institute.