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Landowner response to policies regulating land improvements: lease or search for other options?

Author

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  • Eija, Pouta
  • Sami, Myyra
  • Kyosti, Pietola

Abstract

Land improvements with long pay-back periods are often delayed on leased agricultural land, resulting in social costs through land degradation, decreased land productivity and environmental problems. An important question is thus how landowners would respond to regulations and mandates concerning land improvements. Based on a landowner survey, we analyse landowner choices under certain land improvement regulations, using the currently dominant choice of leasing land for agricultural use as the benchmark. The results indicated that land leasing will continue to increase in the future, but if the landowner mandate to co-finance costly land improvements is increased, landowners are predicted to respond significantly to these mandates and search for other land management options. Three heterogeneous landowner groups were identified based on their land use choices. Current leasers and amenity owners, in particular, were sensitive to land improvement mandates, and would avoid compulsory investment expenses by selling or afforesting their land.

Suggested Citation

  • Eija, Pouta & Sami, Myyra & Kyosti, Pietola, 2011. "Landowner response to policies regulating land improvements: lease or search for other options?," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114770, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaae11:114770
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    File URL: http://purl.umn.edu/114770
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    References listed on IDEAS

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    1. Meredith J. Soule & Abebayehu Tegene & Keith D. Wiebe, 2000. "Land Tenure and the Adoption of Conservation Practices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 993-1005.
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    3. Sami Myyrä & Eija Pouta, 2010. "Farmland Owners’ Land Sale Preferences: Can They Be Affected by Taxation Programs?," Land Economics, University of Wisconsin Press, vol. 86(2), pages 245-262.
    4. Sami Myyrä & Elise Ketoja & Markku Yli-Halla & Kyöisti Pietola, 2005. "Land Improvements under Land Tenure Insecurity: The Case of pH and Phosphate in Finland," Land Economics, University of Wisconsin Press, vol. 81(4).
    5. Jeffrey Englin & Trudy Cameron, 1996. "Augmenting travel cost models with contingent behavior data," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 7(2), pages 133-147, March.
    6. W. Douglass Shaw, 2002. "Testing the Validity of Contingent Behavior Trip Responses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(2), pages 401-414.
    7. Stein Holden & Hailu Yohannes, 2002. "Land Redistribution, Tenure Insecurity, and Intensity of Production: A Study of Farm Households in Southern Ethiopia," Land Economics, University of Wisconsin Press, vol. 78(4), pages 573-590.
    8. Peter Boxall & Wiktor Adamowicz, 2002. "Understanding Heterogeneous Preferences in Random Utility Models: A Latent Class Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 23(4), pages 421-446, December.
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    More about this item

    Keywords

    contingent behaviour; latent class model; landlord; land use; heterogeneity; Land Economics/Use; Q15; Q24; Q28;

    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
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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