The Hedonic Prices Concept of Agricultural Land in the Edinet District by Using a Spatial Autoregressive Model for the Sustainable Rural Development Evaluation

Abstract

The aim of the paper is to identify the regression methodology capable of evaluating land resources in the Republic of Moldova under the aspect of criteria for the consolidation of agricultural land. The value of the plots in the sale-purchase process denotes an autoregressive spatial dependence in which the endogenous value of the market price is mutually influenced depending on the locality, the area, the creditworthiness of the land, the exposure and others. The autocorrelation coefficient is an indicator of the attractiveness of agricultural land in terms of further use for specific purposes (location next to the access road contributes substantially to the market price and adjacent location to rural settlements or economic units intended for storage/processing of agricultural production also considerably affect supply and demand). The fact that the price of parcels in sales-purchase transactions supports a non-stationary behavior according to the Dickey-Fuller test, imposes the hedonic approach in the evaluation of land resources. The spatial econometric model with lag (SAR), which includes the autoregressive component, makes it possible to eliminate the trend with negative effects in the assessment of the market price of agricultural land at the moment represents an appropriate tool in the market analysis of land transactions. The advantages of the SAR implementation in determining the optimal value of agricultural land in the Edineț district allowed the adequate calculation of the price of 8130 plots, in the commune of Zabriceni. The adjacency matrix W in the SAR model is identified by means of the value of sales-purchase contracts registered in the year 2022 in volume of 73 traded parcels. The agricultural land cadastral factors that are included in the spatial autoregressive model are evaluated according to the INGEOCAD maps for the respective year. As a result of the verification of the degree of correspondence of the agricultural land prices evaluated by the SAR method with the offers proposed by professional cadastral appraisers, the significant difference according to the Students’t distribution is lower then 5%. In this way, we can state that the hedonic prices of plots are adequately evaluated and the spatial autoregressive methodology proposed in the paper can be implemented in the practice of land transactions. DOI: https://doi.org/10.53486/dri2024.08; UDC: 330.35:332.63(478); JEL: C01, C23, E31