ECONOMISTS have historically been conditioned to a close relationship betwen the prices of farm products and land values. Land values soared with the increase of commodity prices during World War I, collapsed with prices in 1921, remained steady as prices remained steady in the 1920's, collapsed again with farm prices in the early 1930's, recovered slowly as farm prices increased in the late thirties and during World War II. In the lull between World War II and the Korean war, farm prices and land values moved upward together. Three decades of relatively close correlation between farm prices and land values verified the residual theory of rent, and economists were content that land values were positively related to movements in gross agricultural income. The converse of this, of course, is that if gross income remains steady, land values should remain steady. This has not been the course of events since the end of the Korean episode. In 1952, the U. S. Department of Agriculture estimate of realized gross income was $37.0 billion; in 1964 the estimate was $42.2 billion or an increase of 14 percent. Land values, on the other hand, stood at an index of 83 and 1952 and 131 in 1964, or an increase of more than 57 percent for the period.
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Walter E. Chryst (1965) studied this question.