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Abstract
Measurement of natural resource quality is useful for objectives such as macro production analysis, decisions regarding goverment capital expenditure and agricultural aid programs. Land prices can serve as indicator. Land prices are however influenced by external factors as well as quality of the land. The role of external factors, such as the use or expected use of land for non-agricultural purposes, goverment aid programs and monetary conditions must thus be eliminated so that land prices can be used as barometer of resource quality. A similar study was done in the USA with states as observation units. International indexes with countries as observation units were calculated in another study. In this paper a South African resource quality index with statistical regions as observation units is presented. Good statistical fits were obtained. The following factors contributed significantly to the determination of resource quality indexes: stability of rainfall, irrigation and percentage of land under natural pasture. Change occurs over time. The indexes obtained vary between 53 (Namaqualand) and 239 (Western province fruit region).