Humboldt-Universität zu Berlin - 165th EAAE Seminar 2019 Agricultural Land Markets


Program of the 165. EAAE seminar on Agricultural Land Markets – Recent Developments, Efficiency and Regulation

The 165. EAAE seminar Agricultural Land Markets – Recent Developments, Efficiency and Regulation will be based on oral presentations in plenary sessions by invited speakers and in parallel workgroups. Without prejudging the organization of the sessions, expected topics to be covered by the papers include the following items:

  1. Developments in agricultural land markets and drivers of land prices
    The seminar aims at improving our understanding of recent developments in agricultural land markets. Of particular interest are the roles of non-agricultural investors, institutional land suppliers as well as the impact of agricultural, environmental and energy policies on land prices.

  2. Interrelation of market microstructure and price formation
    Land prices are usually analyzed without explicit reference to the institutional structures, in which they are determined. Thus, it would be promising to go beyond the extant literature on land prices by focusing on the impact of the market microstructure, including trading mechanisms, market participants and their liquidity, but also the role of information in the price-formation process. The influence of specific market conditions on the resulting land price is clearly under-researched.

  3. Urban sprawl, the interaction of rural and urban land markets
    Urban and rural land markets interact, particularly at the fringe of big cities. Zoning regulations target at separating those markets and preventing an unregulated conversion of agriculturally used areas. Scarcity of urban areas, however, creates pressure in agricultural land markets and expected land use changes are capitalized into present land values. Thus, it is worth analyzing the role of urban sprawl regarding the price formation process.

  4. Bargaining power in rural and urban land markets
    Land markets are often characterized by considerable market imperfections due to immobility of land, thin local markets and large ownership fragmentation. Bargaining power is further influenced by information disadvantages, high transaction costs or dependency relationships. Empirical studies assessing the price-decreasing effects of these imperfections are rare. The seminar will address this issue to ensure the opportunity to investigate farmland price formation in the context of non-competitive local markets and unequal bargaining power of sellers and buyers in the urban and rural setting.

  5. Efficiency of agricultural land markets
    Policy makers and stakeholder groups such as farmers often refer to market failures when justifying the need for policy interventions. Thus, it is important to explore, whether empirical evidence of land market (in)efficiencies exist. Efficiency encompasses several dimensions and aspects, such as speculative price bubbles, market power, spatial market integration or environmental efficiency. Adapting standard concepts in these fields, however, is challenging in view of many peculiarities of the production factor “land”.

  6. Impact of existing and proposed regulations on price formation and the allocation of land
    Policy impacts on agricultural land values can be classified into three categories: agricultural policies, tax policies with preferential conditions for agriculture, and regulatory measures. The impact of instruments from the first category on land values can be measured in a straightforward manner by incorporating these instruments into standard policy evaluation models. In contrast, the impact of regulatory measures that affect the mobility of land between sectors (e.g., zoning) or between users (e.g., markets access regulations) are difficult to quantify.

  7. Implications of land market dynamics and land market institutions for land use intensity and environmental parameters
    Land transactions lead to changes in farm size, plot sizes, and ownership structure. Such changes affect land-use composition and land-use intensity, and may thus be tied to alterations in production and environmental outcomes. However, it remains elusive how the changes brought about by recent land market developments have impacted environmental parameters. For example, it is often alleged that small farms provide more ecosystem services and sustain higher levels of biodiversity than larger farms. Similarly, it has been argued that short-term investments and tenancy as compared to long-term ownership lead to suboptimal resource allocation and soil degradation, but the empirical evidence remains weak and ambiguous

  8. Ethical principles to be imposed on agricultural land market transactions
    It is becoming increasingly clear, agricultural land markets do not work in a morally-neutral way. Rather they generate winners and losers, each of which raises legitimate moral claims that are likely to be conflicting. Resolving these moral dilemmas will require a careful empirical mapping of the extant moral claims, their theoretical classification in the landscape of moral philosophy. Relevant arguments will not only be brought to bear on a range of fundamental issues, such as the nature of human rights to land, but can also be used for suggesting reforms in the legal and regulatory frameworks of land markets.

  9. Interaction of land markets and structural change in agriculture
    Farm growth usually comes along with the acquisition of land. Supply of land, on the other hand requires farms to shrink or to quit from agriculture. Thus structural change in agriculture is closely related to land market transactions. Agent based modeling approaches allow to capture these interdependencies and to model demand and supply on local land markets endogenously.

  10. Advances in theoretical framework to better understand agricultural land markets
    Due to its immobility and heterogeneity land differs from other production factors in agriculture and standard approaches of price and markets analysis are not directly applicable, such as spatial market integration and the law of one price. Moreover, land prices may contain option values that account for a switch of use in future. Also, including non-standard approaches into the portfolio of land-related economic theories such as the New Economic Geography will facilitate the understanding of agricultural land markets.

  11. Advances in empirical methods to analyze land prices
    Recent developments in statistical and econometric methods foster the analysis of land markets. For example, spatial price diffusion models can be used to gain a better understanding of convergence and divergence, respectively, in regional land prices. These models enhance standard spatial econometric analyses by accounting for a time dimension. Also, Bayesian approaches or machine learning seem to be promising future paths. The planned seminar will offer opportunities to discuss several methodological advances in the empirical land markets’ context bringing together agricultural economists, applied statisticians and geographers.