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Farm characteristics and exogenous factors influencing the choice to buy land in Italy

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  • Russo, Silvia
  • Raggi, Meri
  • Bimbati, Barbara
  • Povellato, Andrea
  • Viaggi, Davide

Abstract

Access to land is one of the key factors of farm growth. However, related research is characterised by important gaps, in particular, facing the change over time in the nature and role of drivers of the land market. The objective of this paper is to identify the endogenous and exogenous factors that affect the decision to purchase land in Italy between 2013 and 2020. Five probit regression models were implemented to understand the role of a set of different determinants in land investment decision. The results show that factors related to capital in machinery and plant, energy production and the presence of a successor or young farmer are endogenous factors that positively influence the purchase decision. The ratio of rented land to utilised agricultural area and of family work units to total work units are endogenous factors that negatively affect the purchase decision. Exogenous factors related to the cost of capital and inflation rate affect the purchase of land in an opposite way, negatively and positively respectively. The role of Utilised Agricultural Area and Value Added per hectare varies depending on the specialisation considered. The research can support policymakers in designing policies to promote the survival and growth of farms, as well as to facilitate land investment by reducing barriers to land acquisition.

Suggested Citation

  • Russo, Silvia & Raggi, Meri & Bimbati, Barbara & Povellato, Andrea & Viaggi, Davide, 2024. "Farm characteristics and exogenous factors influencing the choice to buy land in Italy," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 14(1).
    • Handle: RePEc:ags:aieabj:393869
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    References listed on IDEAS

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