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The term structure of land lease rates

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  • Odening, Martin
  • Ritter, Matthias
  • Hüttel, Silke

Abstract

This paper applies the concept of a term structure to agricultural land rental prices. Based on theoretical considerations, we develop a hedonic pricing model that allows for different shapes of the term structure curve while controlling for other price-relevant characteristics. We apply this model to land lease contracts in Saxony-Anhalt concluded between 2002 and 2010. We find an upward-sloping term structure at the beginning, that is, market participants expected increasing rental prices. For the subsequent years, however, we detect a single-humped term structure. Hence, market participants revised their expectations and assumed a decline of land rental prices in the long-term.

Suggested Citation

  • Odening, Martin & Ritter, Matthias & Hüttel, Silke, 2015. "The term structure of land lease rates," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 201664, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea15:201664
    DOI: 10.22004/ag.econ.201664
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    References listed on IDEAS

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    Cited by:

    1. Shuai Zhou & Guangqing Chi, 2022. "Farmland Rental: The Impacts of Household Demographics and Livelihood Strategies in China," Land, MDPI, vol. 11(8), pages 1-18, August.
    2. Johanna CHOUMERT & Pascale PHELINAS, 2015. "Farmland Rental Values in GM Soybean Areas of Argentina: Do Contractual Arrangements Matter?," Working Papers 201532, CERDI.
    3. Kuethe, Todd H. & Bigelow, Daniel P., 2018. "Bargaining Power in Farmland Rental Markets," 2018 Annual Meeting, August 5-7, Washington, D.C. 274113, Agricultural and Applied Economics Association.

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