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Rents and Land Prices in Japan: A Panel Cointegration Approach


  • Ana I. Sanjuán
  • Philip J. Dawson
  • Lionel J. Hubbard
  • Sawako Shigeto


The Japanese farmland market is strongly regulated, although partial deregulation and decentralization are evident. This paper examines the relationship between farmland rents and prices in Japan using recent panel cointegration methods, which admit structural breaks. Results show the presence of a cointegrating relationship with significant breaks that increased the rent/price ratio by 9% in 1967 and by 15% in 1980; prices cause rents, which supports an institutional rent-formation hypothesis; and the farmland market is inefficient.

Suggested Citation

  • Ana I. Sanjuán & Philip J. Dawson & Lionel J. Hubbard & Sawako Shigeto, 2009. "Rents and Land Prices in Japan: A Panel Cointegration Approach," Land Economics, University of Wisconsin Press, vol. 85(4), pages 587-597.
  • Handle: RePEc:uwp:landec:v:85:y:2009:i:4:p:587-597

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    References listed on IDEAS

    1. Sergio H. Lence & Douglas J. Miller, 1999. "Transaction Costs and the Present Value Model of Farmland: Iowa, 1900–1994," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(2), pages 257-272.
    2. Falk, Barry L., 1991. "Formally Testing the Present Value Model of Farmland Prices," Staff General Research Papers Archive 11093, Iowa State University, Department of Economics.
    3. ., 1998. "Neumann, John von," Chapters,in: The Elgar Companion to Classical Economics, chapter 120 Edward Elgar Publishing.
    4. David Canning & Peter Pedroni, 2008. "Infrastructure, Long-Run Economic Growth And Causality Tests For Cointegrated Panels," Manchester School, University of Manchester, vol. 76(5), pages 504-527, September.
    5. Allen M. Featherstone & Timothy G. Baker, 1987. "An Examination of Farm Sector Real Asset Dynamics: 1910–85," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(3), pages 532-546.
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    Cited by:

    1. Hotopp, Henning & Mußhoff, Oliver, 2012. "Can rent adjustment clauses reduce the income risk of farms?," International Journal of Agricultural Management, Institute of Agricultural Management;International Farm Management Association, vol. 1(4), July.

    More about this item

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • 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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