Natural Resources, 2013, 4, 506-513 Published Online December 2013 (http://www.scirp.org/journal/nr) http://dx.doi.org/10.4236/nr.2013.48062 Open Access NR Does Climatic Variability Influence Agricultural Land Prices under Differing Uses? The Texas High Plains Case Rachna Tewari 1 , Jeff Johnson 2 , Darren Hudson 2 , Chenggang Wang 2 , Dennis Patterson 3 1 Department of Agriculture, Geosciences, and Natural Resources, The University of Tennessee at Martin, Martin, USA; 2 Department of Agricultural and Applied Economics, Texas Tech University, Lubbock, USA; 3 Department of Political Science, Texas Tech Uni- versity, Lubbock, USA. Email: rtewari@utm.edu Received October 7 th , 2013; revised November 9 th , 2013; accepted November 30 th , 2013 Copyright © 2013 Rachna Tewari et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. In accor- dance of the Creative Commons Attribution License all Copyrights © 2013 are reserved for SCIRP and the owner of the intellectual property Rachna Tewari et al. All Copyright © 2013 are guarded by law and by SCIRP as a guardian. ABSTRACT The Texas High Plains faces projections of increasing temperature and declining precipitation in the future on account of its semi-arid climate. This research evaluated the impact of climatic variability on agricultural land prices under dif- ferent land uses in the Texas High Plains, employing the Ricardian approach of land climate pricing over a study period of 1991-2011. The results indicate that climatic variability had a greater impact on irrigated land prices as compared to dryland and ranchland. This study could be instrumental in predictive market analyses of rural land values in semi-arid economies which are vulnerable to future climate change. Keywords: Climatic Variability; Dryland; Irrigated Land; Land Prices; Ranchland; Texas High Plains 1. Introduction The Texas Southern High Plains is a semi-arid region with a strong agricultural economy and is greatly im- pacted by changes in climatic factors which directly in- fluence the agricultural productivity in the long run. A sizeable proportion of the land in the region is main- tained for agricultural and rangeland uses [1]. The pro- ductivity of a particular land tract is reflected in land values, which can vary from one tract to another, depend- ing on the fertility, soil type, precipitation, and groundwa- ter availability for irrigation, which in turn affect land quality. In this manner, per unit land values clearly vary between irrigated cropland, dryland and rangeland. The 4th assessment report by the International Panel on Cli- mate Change [2] predicted significant impacts on the agricultural productivity of a transitional area like the Texas High Plains. With projections of increasing tem- perature and declining precipitation for the region, there will be a definitive impact on the agricultural productiv- ity and land values in the region. This impacts the real estate markets for agricultural land as irrigated land tends to become scarce in the future. The importance of agri- cultural land itself and changes in agricultural land val- ues for the state of Texas can be attributed to a number of factors. From a countrywide perspective, Texas leads the nation in land area with a total of over 142 million acres devoted to privately-owned farms, ranches and forest- lands [1]. These lands provide numerous benefits to the state’s population with regard to economic, environmental, and recreational uses and account for about 84% of the state’s entire land area [1]. However, with changes in demographics, rural to urban migration, and changes in the rural agricultural economy, agricultural land tends to become a scarce resource. According to accumulated data from County Appraisal Districts, during a 10-year period from 1997 to 2007, over 2.1 million acres of ag- ricultural land comprising farms, ranches and forestlands were lost to other uses [1]. In 2007, the average ap- praised market value of farms, ranches and forestlands in Texas was estimated to be $1196 per acre and this value represented an increase of about 140% in appraised mar- ket value over the 10-year period. Specifically, the High Plains area had appraised market value increases of about 60% over the 10-year period [1]. According to the most recent Texas Rural Value Trends report for the year 2012 [3], the preceding drought in the year 2011 caused crop