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Social Capital and the Terms of Trade for Farmland

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  • Lindon J. Robison
  • Robert J. Myers
  • Marcelo E. Siles

Abstract

Social capital is a person or group's sympathy for or sense of obligation to another person or group. This article introduces social capital into a neoclassical model of farmland exchange and shows how relationships alter the terms of trade. Empirical evidence from a survey of farmers shows that the type of relationship farmland sellers have with farmland buyers has a statistically significant and economically important effect on the minimum-sell price for farmland. Compared to the minimum-sell price when selling to a total stranger in an arm's-length transaction, farmland sellers discount prices to friendly neighbors and relatives and require a premium from unfriendly neighbors and influential people in the community. Copyright 2002, Oxford University Press.

Suggested Citation

  • Lindon J. Robison & Robert J. Myers & Marcelo E. Siles, 2002. "Social Capital and the Terms of Trade for Farmland," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 24(1), pages 44-58.
  • Handle: RePEc:oup:revage:v:24:y:2002:i:1:p:44-58
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    File URL: http://hdl.handle.net/10.1111/1058-7195.00005
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    References listed on IDEAS

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    1. Lindon Robison & A. Allan Schmid & Marcelo Siles, 2002. "Is Social Capital Really Capital?," Review of Social Economy, Taylor & Francis Journals, vol. 60(1), pages 1-21.
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    Cited by:

    1. David R. Just & Andrew S. Hanks, 2015. "The Hidden Cost of Regulation: Emotional Responses to Command and Control," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(5), pages 1385-1399.
    2. Pavel Ciaian & d’Artis Kancs & Johan Swinnen, 2010. "EU Land Markets and the Common Agricultural Policy," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 53(3), pages 1-31.
    3. Ciaian, Pavel, & Kancs, d’Artis & Swinnen, Jo & Van Herck, Kristine & Vranken, Liesbet, 2012. "Rental Market Regulations for Agricultural Land in EU Member States and Candidate Countries," Factor Markets Working Papers 117, Centre for European Policy Studies.
    4. Jerzy Michalek & Pavel Ciaian & d’Artis Kancs, 2014. "Capitalization of the Single Payment Scheme into Land Value: Generalized Propensity Score Evidence from the European Union," Land Economics, University of Wisconsin Press, vol. 90(2), pages 260-289.
    5. 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.
    6. Robison, Lindon J. & Siles, Marcelo E. & Schmid, A. Allan, 2002. "Social Capital And Poverty Reduction: Toward A Mature Paradigm," Agricultural Economic Report Series 10941, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    7. Robison, Lindon J. & Siles, Marcelo E. & Jin, Songqing, 2011. "Social capital and the distribution of household income in the United States: 1980, 1990, and 2000," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(5), pages 538-547.
    8. Ciaian, Pavel & Kancs, d'Artis & Swinnen, Johan F.M. & Van Herck, Kristine & Vranken, Liesbet, 2012. "Institutional Factors Affecting Agricultural Land Markets," Working Papers 120251, Factor Markets, Centre for European Policy Studies.
    9. Van Herck, Kristine & Vranken, Liesbet, 2011. "Direct Payments and Rent Extraction by Land Owners: Evidence from New Member States," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 115543, European Association of Agricultural Economists.
    10. Robison, Lindon & Oliver, Jeffrey & Frank, Kenneth, 2015. "Commodity and Relational Good Exchanges: Commodification and Decommodification," 2015 Allied Social Science Association (ASSA) Annual Meeting, January 3-5, 2015, Boston, Massachusetts 189690, Agricultural and Applied Economics Association.

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