UNITED STATES DEPARTMENT OF AGRICULTURE 
DEPARTMENT BULLETIN No. 1224 
Washington, D. C. ▼ June 11, 1924 
RELATION OF LAND INCOME TO LAND VALUE.' 
By Clyde R. Chambers, Associate Agricultural Economist. 
CONTENTS. 
Page. 
Statement of problem 1 
Sources of data and selection of area 3 
Relation of land income to land value in 1920 6 
Accuracy and representative character of the 
data 10 
Netcashrentsand their relation toland value 26 
Factors determining relationship of land in- 
come toland value at a given time 28 
Long-time tendency in the ratio of land in- 
come to value 37 
Page. 
Anticipated rate of return on investments in 
farmlands 40 
Actualrate of return oninvestments in farm 
lands 40 
Analysis of cash rent as a measure of land in- 
come 47 
Bearing of this study on other problems 64 
Appendix 70 
STATEMENT OF PROBLEM. 
The theoretical relationship between land income and land value is 
well known, but a statistical measure of it on any extensive scale 
has never been attempted. Such a measurement has been made 
possible as a result of data obtained in the census of 1920. Under 
conditions of changing land income four questions must be answered: 
(1) What is the relationship between land income and land value 
at a given time ? (2) What is the long-time tendency in this relation- 
ship ? (3) What is the anticipated relationship between the value at 
a given period and incomes of all later periods I In other words, 
what are future incomes expected to be and what is the rate at which 
they are capitalized? (4) What is the actual relationship between 
the value at a given period and the incomes of later periods '. 
These four phases of the problem exist because we live under 
conditions of changing land income. If it were known for a certainty 
that the incomes earned by land at any given time were to be per- 
petuated for all time, and if the rate of interest were to remain con- 
stant, then the answer to the first question would be an answer 
to all four. But such is not the case. 
i "Land" as used in this study refers throughout to land and improvements. 
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