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Market Power in a GIS-Based Hedonic Price Model of Local Farmland Markets

Author

Listed:
  • Geerte Cotteleer
  • Cornelis Gardebroek
  • Jan Luijt

Abstract

Buyers of farmland are usually interested in parcels for sale that are close to their own farms. With a limited number of parcels for sale, this may lead to market power in local farmland markets. The objective of this paper is to investigate whether market power affects farmland prices. Hedonic price models are adapted to allow for local market power of either sellers or buyers. A distinction is made between rural and urban farmland markets. The results provide evidence of market power effects in rural farmland markets. However, for farmland in urban areas, market prices are dominated by speculation effects.

Suggested Citation

  • Geerte Cotteleer & Cornelis Gardebroek & Jan Luijt, 2008. "Market Power in a GIS-Based Hedonic Price Model of Local Farmland Markets," Land Economics, University of Wisconsin Press, vol. 84(4), pages 573-592.
  • Handle: RePEc:uwp:landec:v:84:y:2008:i:4:p:573-592
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    References listed on IDEAS

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    1. Tamer Isgin & D. Lynn Forster, 2006. "A Hedonic Price Analysis of Farmland Option Premiums Under Urban Influences," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 54(3), pages 327-340, September.
    2. Yue Jin Shi & Timothy T. Phipps & Dale Colyer, 1997. "Agricultural Land Values under Urbanizing Influences," Land Economics, University of Wisconsin Press, vol. 73(1), pages 90-100.
    3. Plantinga, Andrew J. & Lubowski, Ruben N. & Stavins, Robert N., 2002. "The effects of potential land development on agricultural land prices," Journal of Urban Economics, Elsevier, vol. 52(3), pages 561-581, November.
    4. Myles Patton & Seamus McErlean, 2003. "Spatial Effects within the Agricultural Land Market in Northern Ireland," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(1), pages 35-54.
    5. John P. Harding & John R. Knight & C.F. Sirmans, 2003. "Estimating Bargaining Effects in Hedonic Models: Evidence from the Housing Market," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 31(4), pages 601-622, December.
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    Citations

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    Cited by:

    1. Paul Feichtinger & Klaus Salhofer, 2016. "The Fischler Reform of the Common Agricultural Policy and Agricultural Land Prices," Land Economics, University of Wisconsin Press, pages 411-432.
    2. Ludo Peeters & Eloi Schreurs & Steven Passel, 2017. "Heterogeneous Impact of Soil Contamination on Farmland Prices in the Belgian Campine Region: Evidence from Unconditional Quantile Regressions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 135-168.
    3. repec:eee:touman:v:55:y:2016:i:c:p:123-132 is not listed on IDEAS
    4. Letort, Élodie & Temesgen, Chalachew, 2014. "Influence of environmental policies on farmland prices in the Bretagne region of France," Revue d'Etudes en Agriculture et Environnement, Editions NecPlus, pages 77-109.
    5. repec:eee:jhouse:v:36:y:2017:i:c:p:8-24 is not listed on IDEAS
    6. Letort, Élodie & Temesgen, Chalachew, 2014. "Influence of environmental policies on farmland prices in the Bretagne region of France," Revue d'Etudes en Agriculture et Environnement, Editions NecPlus, pages 77-109.
    7. Liljenstolpe, Carolina, 2011. "Valuation of environmental impacts of the Rural Development Program - A hedonic model with application of GIS," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114383, European Association of Agricultural Economists.

    More about this item

    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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