Direct Payments, Cash Rents, Land Values, and the Effects of Imputation in U.S. Farm-level Data

Research using the Agricultural Resource Management Survey (ARMS) and other data shows that direct government payments to farmers increase rents and the price of land. However, some ARMS data is imputed and does not account for relationships between payments and other variables. We investigate various imputation methods and benefits gained from a method with a wide scope rather than a parsimonious range of variables. Using our method, we estimate that an additional dollar of direct payment increases land value about $2.69 more per acre than ARMS imputation methods and that our imputations (using an exhaustive iterative sequential regression) outperform other methods and/or smaller models.