Are Expert Opinions Accurate? Panel Data Evidence from the Iowa Land Value Survey

Abstract

100 words max): Opinion surveys are the dominant method to gauge U.S. farmland values. However, there lacks a systematic evaluation of how opinions are formulated and adjust over time. Using a panel data of 311 agricultural professionals from the Iowa Land Value Survey from 2005 to 2015, we investigate how surveyed experts update their farmland value estimates. We find that experts almost fully correct their prior “errors” in a single period. Experts’ opinions also incorporate most of the prevailing price innovations in one period. Our Bayesian estimation technique simultaneously addresses the non-stationarity of farmland values and the Nickell bias in short dynamic panels. JEL Codes: Q15, Q18