The Fischler Reform of the Common Agricultural Policy and Agricultural Land Prices

Abstract

Based on 7,300 agricultural land sales transactions we estimate the effect of the 2003 reform of the Common Agricultural Policy on land prices. As opposed to the main body of the literature on agricultural land values, we do not start from a demand-oriented net present value approach or hedonic prizing method, but derive our reduced form pricing equation from a spatial land sales market model. Our empirical model accounts for spatial dependence and endogeneity of explanatory variables. A reduction of payments by 50 €/ha would decrease land sales prices by 445 €/ha before and by 984 €/ha after the reform.

Land-Use Competition or Compatibility between Nature Conservation and Agriculture? The Impact of Protected Areas on German Standard Farmland Values

“…This ensures unbiased, consistent and efficient estimation results [25]. Spatial neighborhood relationships are integrated by spatial weight matrices, which have to be defined exogenously by the researcher [6,26]. In the first step, a criterion for defining which of the spatial units are neighbors needs to be determined.…”

“…These studies typically focus on a specific service while taking into account explanatory variables for the others. For example, particular interest was given to the impact of farm payments within the European Common Agricultural Policy (CAP) framework [4][5][6] and other farm programs [7], as well as off-farm income [8], biogas production [9], urban sprawl [10][11][12] and natural amenities [13][14][15].…”

Land markets in EuropeInstitutions and market outcomes 1

“…Guastella et al (2014) find a statistically insignificant impact of the SPS on land rents in Italy, where the historical SPS model is implemented. Nilsson and Johansson (2013) analyze the SPS impacts in Sweden, whereas Kilian et al (2012), Feichtinger and Salhofer (2015b) and Klaiber et al (2016) analyze the SPS impacts in Bavaria (Germany) and find a comparably high capitalization rate. The former study finds that the elasticity of agricultural land sales price with respect to the SPS is 0.54 (i.e., a 1 percent increase in the SPS increases land sales price by 0.54 percent), whereas the latter three studies find that 35 to 94 percent of the SPS are capitalized into land rental prices.…”

The Local Impacts of Agricultural Subsidies: Evidence from the Canadian Prairies

“…Our work contributes to an extensive literature that has attempted to estimate the impact of agricultural subsidies on land values and rents (most recently Breustedt and Habermann, 2011;Ciaian et al, 2018;Ciaian and Kancs, 2012;Feichtinger and Salhofer, 2016;Femenia et al, 2010;Karlsson and Nilsson, 2014;Kirwan, 2009;Klaiber et al, 2017;O'Neill and Hanrahan, 2016). Our work differs from these studies by focusing on the spillover effects of farm income and asset values on the non-agricultural economy.…”