Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/290396 
Year of Publication: 
2024
Series/Report no.: 
FORLand-Working Paper No. 29 (2024)
Publisher: 
Humboldt-Universität zu Berlin, DFG Research Unit 2569 FORLand "Agricultural Land Markets - Efficiency and Regulation", Berlin
Abstract: 
Much of the land economics literature has largely ignored the spatial nature of competition and related differences between farmland rental and sales markets. In this note we propose a model for price formation in both markets under a spatial competition framework. We demonstrate that price formation differs, particularly under policy-induced output price shocks. We suggest that using rent-price ratio as an approximation for expectations in the net returns of farming, based on the net present value model, may produce biased results. We conclude that estimates for the capitalization of agricultural, environmental and energy policy into farmland prices can be biased.
Subjects: 
Land Markets
Rent-price Ratio
Spatial Competition
JEL: 
L13
Q12
Q18
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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