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Is there a term structure in land lease rates?


  • Silke Hüttel
  • Matthias Ritter
  • Viacheslav Esaulov
  • Martin Odening


This article 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. We find an upward-sloping term structure during the agricultural price boom in 2007 and 2008, where 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.

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  • Silke Hüttel & Matthias Ritter & Viacheslav Esaulov & Martin Odening, 2016. "Is there a term structure in land lease rates?," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 43(1), pages 165-187.
  • Handle: RePEc:oup:erevae:v:43:y:2016:i:1:p:165-187.

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    Cited by:

    1. repec:oup:erevae:v:45:y:2018:i:2:p:143-171. is not listed on IDEAS
    2. Kualwik, Jacek, 2016. "Selected problems of farmland valuation and setting rents for its lease," Problems of Agricultural Economics 252639, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
    3. Johanna Choumert & Pascale Phelinas, 2015. "Farmland Rental Values in GM Soybean Areas of Argentina: Do Contractual Arrangements Matter?," Working Papers halshs-01237771, HAL.

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