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Title:The Incidence of EU Per-Hectare Payments on Farmland Rental Rates: A Spatial Econometric Analysis for German Farm-Level Data PDF Logo
Authors:Breustedt, Gunnar
Habermann, Hendrik
Issue Date:2010
Series/Report no.:Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Panel Data Models C15-V3
Abstract:This article analyses determinants for 2001 farmland rental prices from 3,819 farms in Germany. Based on specification tests we estimate a general spatial model to account for both spatial relationships among rental prices of neighbouring farmers and spatially autocorrelated error terms. Depending on the choice of instrumental variables, a €1 per hectare higher rental price in a farmer's neighbourhood coincides with a €0.64 to €0.74 higher rental price the farmer pays. The marginal incidence of EU per-hectare payments paid for eligible arable crop acreage amounts to €0.48 to €0.95 for each additional € of premium payments. Regional livestock density, which is indirectly influenced by different policies, is also a major determinant for rental prices. Consequently, German farmland rental rates are heavily influenced by agricultural policy instruments and therefore, these policies exhibit substantial distributional effects.
Subjects:farmland rental price
per-hectare payment
spatial econometrics
subsidy incidence
Document Type:Conference Paper
Appears in Collections:Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie

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