THE CAUSAL STRUCTURE OF LAND PRICE DETERMINANTS

This paper investigates causation contemporaneously and over time to elucidate the persistent lack of agreement about what "causes" changes in farmland prices. Using recently developed causal modeling framework of directed acyclic graphs (DAGs) and cointegrated (VAR) techniques, the assumed causal structures of existing structural and empirical models are tested directly. The results validate concerns about the nonstationarity of these series. Land price changes are found to respond to a small subset of the oft-cited causes of price change, including macroeconomic variables.