Are Expert Opinions Accurate? Panel Data Evidence from the Iowa Land Value Survey
Wendong Zhang, Sergio H. Lence, Todd Kuethe
December 2020 [20-WP 612]
Zhang, W., S.H. Lence, and T. Kuethe. 2020. "Are Expert Opinions Accurate? Panel Data Evidence from the Iowa Land Value Survey." Working paper 20-WP 612. Center for Agricultural and Rural Development, Iowa State University.
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.