Forced Sales And Farmland Prices
AbstractIn this paper we analyse agricultural land prices in the state Brandenburg. Our objective is to understand the price formation in foreclosures. Knowledge of the impact of foreclosures is desirable for the determination of mortgage lending values. The effect of foreclosures can be decomposed into two parts. First, the effect of a pressured sale, which will likely reduce the realized price compared with an unpressured sale and second, the effect of an auction, which may lead to a price premium. The empirical analysis is based on a rich data set of land prices in Brandenburg between 2000 and 2011 provided by the “Oberer Gutachterausschuss für Grundstückswerte”. The treatment effect of forced sales is derived by means of a statistical matching approach. Our results show that on average prices premia rather than price discounts are realized in forced sales of agricultural land. The price differential between forced and nonforced sales, however, is not constant but depends on the land market conditions.
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Bibliographic InfoPaper provided by German Association of Agricultural Economists (GEWISOLA) in its series 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 with number 133413.
Date of creation: 2012
Date of revision:
Forced sales; land prices; treatment effect; Zwangsversteigerung; Landpreise; Treatmenteffekt; Agricultural and Food Policy; Financial Economics; Land Economics/Use;
Other versions of this item:
- Huttel, Silke & Jetzinger, Simon & Odening, Martin, 2012. "Forced Sales and Farmland Prices," Structural Change in Agriculture/Strukturwandel im Agrarsektor (SiAg) Working Papers 129063, Humboldt University Berlin, Department of Agricultural Economics.
- Odening, Martin & Jetzinger, Simon & Huettel, Silke, 2013. "Forced Sales and Farmland Prices," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150274, Agricultural and Applied Economics Association.
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