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Inflation hedging effectiveness of farmland and timberland assets in the United States

Publication ,  Journal Article
Baral, S; Mei, B
Published in: Forest Policy and Economics
June 1, 2023

We examine the effectiveness of private- and public-equity farmland and timberland assets in hedging actual, expected, and unexpected inflation by using the capital asset pricing model under inflation. Rolling regression is used to assess the time-varying ability of hedging inflation. Results show that private-equity farmland can hedge all inflation types with a 15-year investment horizon, whereas private- and public-equity timberland can hedge expected and unexpected inflation with 15- and 30-year investment horizons. Public-equity farmland is found to be an ineffective inflation hedge in the whole sample period (2013Q1-2021Q4). Rolling regression reveals that the financial crisis of 2008 is the cutoff period after which public-equity farmland and timberland assets become more effective inflation hedges and the ability gets stronger as the investment horizon goes beyond 10 years. Overall, results suggest that the inflation hedging effectiveness depends on the investment horizon and the state of the economy, and differs across farmland and timberland assets.

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Published In

Forest Policy and Economics

DOI

ISSN

1389-9341

Publication Date

June 1, 2023

Volume

151

Related Subject Headings

  • Forestry
  • 4104 Environmental management
  • 3801 Applied economics
  • 3007 Forestry sciences
  • 1605 Policy and Administration
  • 1402 Applied Economics
  • 0705 Forestry Sciences
 

Citation

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Baral, S., & Mei, B. (2023). Inflation hedging effectiveness of farmland and timberland assets in the United States. Forest Policy and Economics, 151. https://doi.org/10.1016/j.forpol.2023.102969
Baral, S., and B. Mei. “Inflation hedging effectiveness of farmland and timberland assets in the United States.” Forest Policy and Economics 151 (June 1, 2023). https://doi.org/10.1016/j.forpol.2023.102969.
Baral S, Mei B. Inflation hedging effectiveness of farmland and timberland assets in the United States. Forest Policy and Economics. 2023 Jun 1;151.
Baral, S., and B. Mei. “Inflation hedging effectiveness of farmland and timberland assets in the United States.” Forest Policy and Economics, vol. 151, June 2023. Scopus, doi:10.1016/j.forpol.2023.102969.
Baral S, Mei B. Inflation hedging effectiveness of farmland and timberland assets in the United States. Forest Policy and Economics. 2023 Jun 1;151.
Journal cover image

Published In

Forest Policy and Economics

DOI

ISSN

1389-9341

Publication Date

June 1, 2023

Volume

151

Related Subject Headings

  • Forestry
  • 4104 Environmental management
  • 3801 Applied economics
  • 3007 Forestry sciences
  • 1605 Policy and Administration
  • 1402 Applied Economics
  • 0705 Forestry Sciences