Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/321719 
Year of Publication: 
2021
Citation: 
[Journal:] Bio-based and Applied Economics (BAE) [ISSN:] 2280-6172 [Volume:] 10 [Issue:] 1 [Year:] 2021 [Pages:] 7-17
Publisher: 
Firenze University Press, Florence
Abstract: 
We study the capitalisation of subsidies in the European Union (EU) regions in the years 2006-2008, the first years after the introduction of the Common Agricultural Policy (CAP) 2003 reform that decoupled subsidies from production and attached them to land. For this purpose, we use regional aggregated data and estimate the capitalisation rate upon the entire sample and, in a second stage, splitting the sample according to the implementation regime applied by the different EU Member States (MSs), following the three options introduced by the CAP regulations (historical, regional and hybrid model). We find that between 28 and 52 cents per Euro of additional subsidy capitalise into land prices in MSs that adopted the hybrid and the regional model, respectively. We find as well that subsidies do not capitalise in farmland prices in MSs that adopted the historical model.
Subjects: 
European Union
capitalisation of EU payments
land rental prices
spatial panel econometrics
JEL: 
Q12
Q18
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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