Effects of volatile output prices on agricultural land-use change
AbstractVolatile output prices lead to a fluctuating shadow price (profitability) of agricultural land, and therefore may impact land use decisions in case of risk-averse behaviour. In this paper we assess the effect of volatile agricultural output prices on agricultural land-use change over the past decade in the Netherlands. Using regional data from 2000 through 2009, the number of hectares of land for 10 land uses was calculated. To determine the joint distribution of agricultural activities, hectares of land for each land use were converted to land share equations. Land share equations were estimated to determine the contribution of increased price volatility to land use change. Results show that larger volatility affects land shares negatively. Producer’s output responses, therefore, were consistently affected by risk-averse behaviour.
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Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 123rd Seminar, February 23-24, 2012, Dublin, Ireland with number 122472.
Date of creation: 23 Feb 2012
Date of revision:
land-use; risk; price volatility; Risk and Uncertainty; Q1; D8;
Find related papers by JEL classification:
- Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
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