Land, real property, plots : conceptual divagations in Polish economic thought

Abstract

PURPOSE: The subject of consideration of this article are dilemmas around the price and value of agricultural land.

DESIGN/METHODOLOGY/APPROACH: The problem of determining the value and price of land raises numerous controversies. Considering the fact that value is an abstract notion, it is not a tangible and concrete thing, it is not in the essence of a commodity, good or service but is created in the minds of market participants, it is always subjective. Determination of the level of land value by an expert appointed for this purpose does not eliminate subjectivity, because objective assessment is not possible, therefore valuation is always an opinion about value.

FINDINGS: There is a view in economic theory that value should not be equated with price, nor price with value. On this occasion the question sometimes arises whether value equals price or vice versa. Taking into account that an attempt to answer the above question must be connected with interdisciplinarity of the issue and a certain risk connected with it, undoubtedly a lot of other, differently understood questions remain open, such as those concerning attributes which shape the price and value of agricultural land.

PRACTICAL IMPLICATIONS: Price is the external expression of value, usually refers to the selling price or transaction price, is an accomplished fact and has to do with exchange. It represents the amount that a particular buyer agrees to pay and a particular seller agrees to accept under the terms of a particular transaction. When studying objects of the agricultural land market, it is necessary to assume a set of basic features which, when describing real estate, influence its value as well as its price.

ORIGINALITY/VALUE: Not only in economic theory, but also in real estate market practice, it is confirmed that price and value are different categories. In the real estate market, the objects are real estate and the services for using it. Each object has its value, which is adjusted during the market transaction. It then becomes the price obtained for the item.