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Abstract

This paper has a two-fold contribution, 1) Examine the importance of aggregate economic policy on housing prices and rural housing prices, and 2) delineate factors resulting in divergent housing prices between urban and rural markets. Empirical application to US state level data from 1975-2006 indicates general economic variables are consistently influencing both urban and rural housing prices. While the farm economic variables do have differential influences on the housing and rural housing prices, their effects are transitory. Finally regional effects have greater impact on differential effects on urban rural housing price indexes than national farm programs.

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