Real Estate industry (360) treated as a factor

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    DougO
    Not sure what you mean. Land is an asset, purchase of land is mostly just a swapping of assets (my cash for your land). The principal of the swap causes no impact. Any fees involved, realty, financing, lawyer etc. will and needs to be applied to the appropriate sector. The output of the real estate sector includes the fees paid for land deals, landlord management fees, and rent paid by businesses/households. Is does not include the principal values of land sales.
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    jmonge
    My question was not phrased correctly, my apologies. I'm currently working on a CGE model that deals with land-use change in the agricultural and forestry sectors. I have county-level land rent figures for the different industries included in agriculture and forestry. I would like to include these rents into a SAM but I do not know where to include them. I have found a couple of studies that use CGE models treating land as a primary factor and are based on IMPLAN SAMs. These studies include the land rent component as a share of value added (i.e. capital). However, in a previous thread you suggested to use the Real Estate sector (360) to account for these rents in the SAM. I would like to know if what these other studies are suggesting to do is appropriate and if it is, what would be the correct way to proceed in a model that deals with land-use change. Kindly, Juan Monge
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    DougO
    People use IMPLAN Social Accounts as inputs into CGE models. My knowledge of CGE is very limited so I can't comment on what other studies are suggesting (especially since I haven't read the other studies). Yes, tenant farmer's land rents are paid to the real estate sector. The ownership expenses for managing the land are part of the real estate production function and the profits are then collected by the other property type income component of value added. The opti is then turned over to ownership (households, enterprise) in the social accounting matrix. If you wish to make the rents more directly related to farming, you could remove the payment to real estate and place it directly into the farm opti. However, you will need to re-balance the real estate sector (reduce its opti and output).
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    jmonge
    I recently authored an article published in [i]Economic Systems Research[/i] modifying regional IMPLAN SAMs to reallocate the land rents normally included in the Real Estate industry (360) into a land production factor. This simplifies the treatment of land as a factor of production for CGE models. The article can be found in the following link: http://www.tandfonline.com/eprint/tJJbUbzpA4w2GmTwZaBB/full I have made the GAMS code implementing the method freely available for download at: http://afpc.tamu.edu/pubs/15/592/sam_code.zip Users will need their own IMPLAN data, but will be saved the extensive work required to collect detailed land rent and other data, and the complex work required for all data manipulation.
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