An empirical depreciation model for agricultural tractors in Spain

Abstract

This work analyses the market value of second hand agricultural tractors in Spain for the period 1999-2002, with the aims of obtaining the most appropriate valuation models (through the use of ordinary least squares regression) and proposing an empirical model that estimates the true depreciation of these vehicles. Differences in tractor depreciation were studied in terms of the three horsepower groups normally employed (< 60, 60-90, > 90 hp), as well as in terms of a new power classification (< 80, 80-133 and > 133 hp) that appears to better reflect the influence of horsepower on the change in market value. The results show tractor depreciation to be exponential, with larger, more powerful tractors depreciating more quickly than smaller machines.