Texas rural land market integration: A causal analysis using machine learning applications
Year: 2024
Type: article
Abstract: Texas rural land markets have several special features that makes it unique from other rural land markets in the United States. In 2021, Texas agricultural land, including buildings, is valued at $299.88 billion, which is almost 10% of the nation’s total agricultural real estate value and 83% of the state’s land is categorized as rural. In addition, due to its size and geologic features, Texas’ diverse landscape creates widely divergent conditions affecting ownership and marketing of the land. Texas is in the center of crude oil and natural gas production with 223 counties out of 254 having oil and/or natural gas production. Texas has the most farms and the highest farm acreage in the nation. These extensive agricultural uses of rural land in Texas significantly affect its land markets. This study utilizes cutting-edge machine learning algorithms and probabilistic graphical models to uncover causal interaction patterns of the different rural land markets of Texas. A unique quarterly transactional land value dataset, 1966-2017 is used. Results reveal that Texas rural land markets are interdependent. Current and potential landholders and lenders can use the results from this work to aid strategic decision making. Financial institutions and investment groups could be aware of the trend of one land market based on the other market and adjust their holdings accordingly. Landowners may better understand changes in net wealth, which affect their ability to borrow capital and operate efficiently. Lenders may also benefit from the information to manage collateral and maintain the stability of their operation.
Institution: Texas A&M University
Language: English
Subfield: Safety Research
Field: Social Sciences
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $2,200
OpenAlex ID: W4404171375