{"title":"Risk and return of heterogenous farmland locations and qualities","authors":"Ashraf Noumir, M. Langemeier","doi":"10.22434/ifamr2021.0051","DOIUrl":null,"url":null,"abstract":"Using data on farmland values in Indiana and Iowa, this study examines the risk and return characteristics surrounding top, medium, and poor farmland qualities in different locations in these two states. We find that systematic risks of locations/qualities are very low (indistinguishable from 0). In terms of risk-adjusted return, our results show that Indiana farmland has more excess return and higher reward-to-risk ratios than Iowa. Also, adding the quality dimension to the geographic dimension in portfolio selection strategies improved the portfolio reward-to-risk ratio for Indiana but not for Iowa. Interestingly, we found that the average quality farmland has more weight in portfolios relative to top- and poor-quality farmland.","PeriodicalId":49187,"journal":{"name":"International Food and Agribusiness Management Review","volume":"6 7 1","pages":""},"PeriodicalIF":1.5000,"publicationDate":"2022-04-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Food and Agribusiness Management Review","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.22434/ifamr2021.0051","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"AGRICULTURAL ECONOMICS & POLICY","Score":null,"Total":0}
引用次数: 1
Abstract
Using data on farmland values in Indiana and Iowa, this study examines the risk and return characteristics surrounding top, medium, and poor farmland qualities in different locations in these two states. We find that systematic risks of locations/qualities are very low (indistinguishable from 0). In terms of risk-adjusted return, our results show that Indiana farmland has more excess return and higher reward-to-risk ratios than Iowa. Also, adding the quality dimension to the geographic dimension in portfolio selection strategies improved the portfolio reward-to-risk ratio for Indiana but not for Iowa. Interestingly, we found that the average quality farmland has more weight in portfolios relative to top- and poor-quality farmland.
期刊介绍：
The IFAMR is an internationally recognized catalyst for discussion and inquiry on issues related to the global food and agribusiness system. The journal provides an intellectual meeting place for industry executives, managers, scholars and practitioners interested in the effective management of agribusiness firms and organizations.
IFAMR publishes high quality, peer reviewed, scholarly articles on topics related to the practice of management in the food and agribusiness industry. The Journal provides managers, researchers and teachers a forum where they can publish and acquire research results, new ideas, applications of new knowledge, and discussions of issues important to the worldwide food and agribusiness system. The Review is published electronically on this website.
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