ABSTRACT
The basic agricultural principle implicit in the Ricardian approach is that the underlying functional form of the relationship between temperature and agricultural productivity is hillshaped (MNS, 1996). Where temperatures are generally low, say around 0°C, land is not very suitable for agricultural production and the value of such land approaches zero. As temperatures increase above 0°C, agricultural possibilities and farmland value increase assuming that soil moisture conditions are suitable. Above some optimal temperature, however, agricultural productivity and farmland value begin to decline. At relatively high temperatures, land again becomes unsuitable for agricultural production (even with sufficient water) and farmland value is low. However, the models presented in MNS (1994) are not fully consistent with this basic Ricardian principle (see MNS, 1996). While MNS’s cropland model is consistent with the principle, their crop-revenue model is not (see Darwin, 1999). The omission of an important variable-irrigation-is a likely reason.
