The capitalization of changes in property taxes levied on farm real estate is investigated. The per acre value of farm real estate in the United States is estimated as a function of the effective tax rate and as a function of three categories of independent variables which are related to agricultural productivity, farm size, and urban influence in a cross‐section study. The effect of anticipated appreciation in farm real estate values is explored in estimating the extent of capitalization. The results of the study are consistent with the hypothesis that changes in property taxes are largely capitalized into farm property values.
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E. C. Pasour (1975) studied this question.
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