Miller, Crystelle Leigh (2006-12). The price-size relationship: analyzing fragmenation of rural land in Texas. Master's Thesis.
According to the USDA, Texas leads all other states in the loss of rural farming and
ranching land. Most research on rural land value has been associated with trying to
explain price per acre movements, yet few studies have analyzed the relationship of
market factors such as size on the total purchase price. This research focused on the
parcel size and price per acre relationship that exists for Texas rural lands. The objective
of this research was to examine the relationship between size and price per acre of land
parcels sold in Texas and to analyze the presence of fragmentation of agricultural lands.
Data on Texas land sales of parcels greater than ten acres from 1965-2004 were used.
The relationship between price per acre and parcel size was analyzed for Texas
as a whole and for eight separate farmland regions. Each region was analyzed over eight
time periods to test for changes in the land market for different periods. The results
indicated a statistically significant inverse relationship between price per acre and parcel
size which held in all eight regions and each of the eight five-year time periods. Personal
income of the buyers had a greater influence on price per acre than net farm income.
Fragmentation was verified by comparing percent of sales in eight categories of
acres sold, ranging from 10 acres to over 1,280 acres. Over the time period 1966-2004,
the percent of sales for smaller parcels, 21-40 acres, increased and for moderate size parcels, 81-320 acres, the percent of sales decreased. The increase in percent of sales for
smaller parcels and the conversion of moderate size parcels of 81-320 acres into less
than forty acre parcels, suggests that fragmentation has occurred. Furthermore, the
percent of sales for parcels larger than 320 acres increased over the time period which
mitigated the effects of fragmentation.