Hello I have an agriculture food policy economic question and I am having trouble understanding the concept of the question. Below I have attached the image of the question a long with my answer. Feel free to correct me.

All of the following are true about the capitalization model except one. Which is it? is a reliable indicator of a farmer's income helps explain lack of change in agricultural policy 0 shows that expected growth in earnings is an important determinant of land values incorporates the value of subsidies into land values