AGRICULTURAL ECONOMICS 



another income-bearer which may yield a larger 

 or smaller annual income as the years go by, but 

 which will probably yield a smaller income in the 

 future than at present. This circumstance makes 

 it impossible to do more than approximate the 

 actual present value of a piece of land. 



The presence of so many uncertainties makes 

 the buying of land partake more or less of the 

 character of speculation, and during times of pros- 

 perity the tendency is for men to be optimistic and 

 over-estimate the probabilities of a rise in rents or 

 a fall in the rate of interest. On the other hand, 

 when periods of depression come, the tendency is 

 for men to underestimate the future possibilities. 

 As a result of this psychological element, the tend- 

 ency is for the price of land to rise too high dur- 

 ing periods of prosperity and to sink too low dur- 

 ing periods of depression. As many years are 

 usually required for one of these changes from 

 undervaluation to overvaluation to take place, 

 land does not lend itself so readily to speculation 

 as does wheat, for example ; and yet the man with 

 plenty of funds which are available at the right 

 time may win large profits from speculations in 

 land. Speculation if indulged in at the proper 

 time may keep the price of land from falling so 

 low as it might otherwise do in times of depres- 

 sion, and also from rising so high as it otherwise 

 might during times of inflated values. This is 

 true only where the speculator is wise enough to 



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