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Forced Sales and Farmland Prices

Author

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  • Silke Hüttel
  • Simon Jetzinger
  • Martin Odening

Abstract

We analyze farmland prices in the German federal state of Brandenburg from 2000 to 2011 with the aim to understand the price formation process in farmland foreclosures. Pressured sales usually result in a price discount due to time constraints; however, the land is sold using public auctions. This may lead to a price premium. Since the effect of a foreclosure on farmland prices is ambiguous, we empirically quantify the overall effect. We use matching techniques and a regression-based approach. We find that on average, price premiums are realized, though the effect depends on prevailing land market conditions.

Suggested Citation

  • Silke Hüttel & Simon Jetzinger & Martin Odening, 2014. "Forced Sales and Farmland Prices," Land Economics, University of Wisconsin Press, vol. 90(3), pages 395-410.
  • Handle: RePEc:uwp:landec:v:90:y:2014:iii:1:p:395-410
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    Cited by:

    1. Roman Čibera & Tomáš Krabec, 2016. "Behavioral Finance and Asset Valuation in Insolvency Proceedings," Ekonomika a Management, University of Economics, Prague, vol. 2016(1).

    More about this item

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices

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