Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/338897 
Year of Publication: 
2025
Citation: 
[Journal:] German Journal of Agricultural Economics (GJAE) [ISSN:] 2191-4028 [Volume:] 74 [Year:] 2025 [Pages:] 1-33
Publisher: 
TIB Open Publishing, Hannover
Abstract: 
Farmland fragmentation in use is related to higher operation cost and reduced productivity, while ownership fragmentation increases transaction costs, both leading to ineffi-cient land use and diminished overall farm performance. This paper aims to quantify the costs of farmland ownership fragmentation using a market-based approach. We hypothesize that buyers and sellers in the farmland market have a lower valuation and demand for spatially separated farmland. To test this hypothesis, we analyze a rich dataset of 24,528 arable land transactions from the eastern German Federal State of Brandenburg from 2000 to 2022 that includes information on whether the traded land was spatially fragmented. Using a doubly ro-bust approach combining matching and regression, we find that package transactions of spa-tially separated parcels achieve on average 6.7% lower prices than transactions of single par-cels with the same size and comparable characteristics. The quantified markdown for pack-ages suggests that market participants associate costs with fragmentation and consider these into their valuation for farmland.
Subjects: 
Fragmentation
Land M arket
Farmland Pricing
Matching
Hedonic Model
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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