How better soil management could affect property prices

The goal of this project was to understand how soil management practices influence property prices, so farmers can better understand the pay-off from investments in improving soil management. A hedonic pricing model that uses internal and external factors to determine a property’s value or price was be applied.

Hedonic pricing models measure the effect of identified factors on future property prices through statistical analyses that determine the relationship between different data points. To build a hedonic pricing model, it is critical to collect data about property prices and the identified factors. This is what this project sought to achieve.

The project had three components:

1. Data collection of property sale prices
2. Data collection of contributing factors from a farmer perspective
3. Training of a research officer in hedonic pricing model analysis

The project team collected and built datasets on the following:

• Sources and availability of data required for hedonic price analysis,
• Soil feature and soil management databases and geographic information system (GIS) layers,
• Property sale prices,
• A range of other property characteristics including (farm size, fencing, slope, yield, vegetation, presence of a house, farm infrastructure, accessibility etc.), and
• Farmer contact details.

The project involved interviews with farmers and property agents to better understand the factors influencing farmers when purchasing properties.

*This project has additional funding provided by the NSW Government Department of Industry’s Research Attraction and Acceleration Program (RAAP).