A Spatial Bayesian Hedonic Pricing Model of Farmland Values

In 1973, British Columbia created the Agricultural Land Reserve (ALR) to protect farmland from development. This study investigates whether the ALR has been effective near the city of Victoria. Therefore, we employ a GIS-based hedonic pricing model and quantify ALR specific measures. Bayesian Model Averaging in combination with Markov Chain Monte Carlo Model Composition are used to address specification uncertainty. Results show that zoning schemes are partly credible. Zoned farmland sells for lower prices than other farmland. However, farmland located closer to the city of Victoria is priced higher and hobby farmers pay higher prices than conventional farmers.