THE EVOLUTION OF AGRICULTURAL SOIL QUALITY: A METHODOLOGY FOR MEASUREMENT AND SOME LAND MARKET IMPLICATIONS

We apply two innovative econometric approaches to crop trials data to examine effects of rotations and fertilizer use on dynamics of soil quality and corn yields. First, we develop a random coefficients model of yield responses to nitrogen fertilizer and rotations to evaluate both short- and long-run substitutability of N fertilizer for rotation. Second, we construct a dynamic structural model to explicitly recover an indirect but general measure of soil quality. The results yield insights about optimal soil-conserving investments under asymmetric information.