This article investigates the effects that the macroeconomic environment and the specific determinants of the agricultural sector have had on the growth of land prices in Uruguay.
From the estimation of structural models of time series such as those proposed by Harvey, the main regularities of the behavior of this variable were explored. The results show that although the price of land in Uruguay has exhibited an increasing trend during the last three decades, its behavior has been affected by significant oscillations, whose average duration is between 8 and 9 years.
The study of the long-term determinants of land prices (analyzed using the cointegration methodology proposed by Johansen) reveals that the value of agricultural production has been the most important factor in explaining the behavior of the variable and that the variations in the real exchange rate greatly influence its trajectory.
These findings allow, in turn, to affirm that the recent evolution of the price of land does not reveal substantive departures from the equilibrium trajectory that results from the trend evolution of its determinants.