Advanced Search
MyIDEAS: Login to save this paper or follow this series

SPS Capitalization into Land Value : Generalized Propensity Score Evidence from the EU

Contents:

Author Info

  • Pavel Ciaian
  • d'Artis Kancs
  • Jerzy Michalek

Abstract

This paper estimates the capitalization of the Single Payment Scheme (SPS) into land values. The theory suggests that the relationship between the SPS and land rents is non-linear and discontinuous, because the SPS impact on land values depends on many factors, such as policy implementation details, market imperfections and institutional regulations. In empirical analysis we employ a unique farm-level panel data set, and apply the generalized propensity score (GPS) matching approach to estimate the capitalization of the SPS. Our results suggest that around 6 percent of the total SPS get capitalized into land rents. On average in the EU, the non-farming landowners' gains from the SPS are only 3 percent. However, there is a large variation in the capitalization rate for different SPS levels, and between Member States (between 0 and 58 percent).

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.econ.kuleuven.be/licos/publications/dp/dp293.pdf
Download Restriction: no

Bibliographic Info

Paper provided by LICOS - Centre for Institutions and Economic Performance, KU Leuven in its series LICOS Discussion Papers with number 29311.

as in new window
Length:
Date of creation: 2011
Date of revision:
Handle: RePEc:lic:licosd:29311

Contact details of provider:
Postal: De Bériotstraat 34, B-3000 Leuven
Phone: +32 (0) 16 / 32 6598
Fax: +32 (0) 16 / 32 6599
Email:
Web page: http://www.econ.kuleuven.be/licos
More information through EDIRC

Related research

Keywords: decoupled subsidies; capitalization; land market; income distributional effects; selection bias;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Stefan Kilian & Klaus Salhofer, 2007. "Single Payments of the CAP: Where Do the Rents Go?," Discussion Papers 012007, Technische Universität München, Environmental Economics and Agricultural Policy Group.
  2. Alston, Julian M. & James, Jennifer S., 2002. "The incidence of agricultural policy," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 2, chapter 33, pages 1689-1749 Elsevier.
  3. Patton, Myles & Kostov, Philip & McErlean, Seamus & Moss, Joan, 2008. "Assessing the influence of direct payments on the rental value of agricultural land," Food Policy, Elsevier, vol. 33(5), pages 397-405, October.
  4. Pavel Ciaian & Johan F.M. Swinnen, 2006. "Land Market Imperfections and Agricultural Policy Impacts in the New EU Member States: A Partial Equilibrium Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(4), pages 799-815.
  5. Charles H. Barnard & Gerald Whittaker & David Westenbarger & Mary Ahearn, 1997. "Evidence of Capitalization of Direct Government Payments into U.S. Cropland Values," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(5), pages 1642-1650.
  6. Michael J. Roberts & Barrett Kirwan & Jeffrey Hopkins, 2003. "The Incidence of Government Program Payments on Agricultural Land Rents: The Challenges of Identification," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(3), pages 762-769.
  7. Gunnar Breustedt & Hendrik Habermann, 2011. "The Incidence of EU Per‐Hectare Payments on Farmland Rental Rates: A Spatial Econometric Analysis of German Farm‐Level Data," Journal of Agricultural Economics, Wiley Blackwell, vol. 62(1), pages 225-243, 02.
  8. Joe Dewbre & Jes�s Ant�n & Wyatt Thompton, 2001. "The Transfer Efficiency and Trade Effects of Direct Payments," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(5), pages 1204-1214.
  9. Marion Desquilbet & Hervé Guyomard, 2002. "Taxes and Subsidies in Vertically Related Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(4), pages 1033-1041.
  10. Sergio H. Lence & Ashok K. Mishra, 2003. "The Impacts of Different Farm Programs on Cash Rents," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(3), pages 753-761.
  11. Kilian, Stefan & Salhofer, Klaus, 2008. "Single Payments of the CAP: Where Do the Rents Go?," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 9(2), June.
  12. Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 605-54, October.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Olper, Alessandro & Raimondi, Valentina & Cavicchioli, Daniele & Vigani, Mauro, . "Reallocation of Agricultural Labor and Farm Subsidies: Evidence From the EU Regions," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126645, International Association of Agricultural Economists.
  2. Pavel Ciaian & d'Artis Kancs & Johan F.M. Swinnen, 2008. "Static and Dynamic Distributional Effects of Decoupled Payments: Single Farm Payments in the European Union," LICOS Discussion Papers 20708, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  3. Pavel Ciaian & Jan Falkowski & d'Artis Kancs, 2012. "Access to credit, factor allocation and farm productivity: Evidence from the CEE transition economies," Agricultural Finance Review, Emerald Group Publishing, vol. 72(1), pages 22-47, March.
  4. Mela, Giulio & Longhitano, Davide & Povellato, Andrea, 2012. "The evolution of land values in Italy. Does the influence of agricultural prices really matter?," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122479, European Association of Agricultural Economists.
  5. Olper, Alessandro & Raimondi, Valentina & Cavicchioli, Daniele & Vigani, Mauro, 2013. "Does Common Agricultural Policy Reduce Farm Labor Migration? A Panel Data Analysis Across EU Regions," Proceedings Issues, 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain 152326, International Agricultural Trade Research Consortium.
  6. Olper,Alessandro, & Raimondi,Valentina & Cavicchioli,Daniele & Vigani,Mauro, 2012. "Does the Common Agricultural Policy Reduce Farm Labour Migration? Panel data analysis across EU regions," Factor Markets Working Papers 133, Centre for European Policy Studies.
  7. Ciaian, Pavel & Pokrivcak, Jan & Kancs, d'Artis, 2013. "Empirical Evidence of the Distributional Effects of the CAP in New EU Member States," Working Papers 157117, Factor Markets, Centre for European Policy Studies.
  8. Pavel Ciaian & d'Artis Kancs & Johan Swinnen, 2014. "The Impact of the 2013 CAP Reform on Land Capitalization," EERI Research Paper Series EERI RP 2014/07, Economics and Econometrics Research Institute (EERI), Brussels.
  9. Ciaian, Pavel & Kancs, d'Artis & Swinnen, Johan F.M., 2012. "European Union Land Markets and the Common Agricultural Policy," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126683, International Association of Agricultural Economists.
  10. Ciaian, Pavel & Kancs, d'Artis & Swinnen, Johan F.M., 2012. "Income Distributional Effects of Decoupled Payments: Single Payment Scheme in the European Union," Working Papers 129428, Factor Markets, Centre for European Policy Studies.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:lic:licosd:29311. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.