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The capitalization of area payments into land rental prices: a panel sample selection approach

Author

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  • Guastella, Gianni
  • Moro, Daniele
  • Sckokai, Paolo
  • Veneziani, Mario

Abstract

Previous empirical literature suggests that agricultural subsidies are capitalized into farmland rents and that the introduction of the 2003 decoupling reform of the EU Common Agricultural Policy, attaching the subsidy to land only, might have even extended the phenomenon of capitalization. Employing the FADN dataset for Italy we investigate this issue using methodologies accounting for selectivity, endogeneity and individual heterogeneity simultaneously. The evidence suggests that selectivity bias causes inconsistent estimation of parameters and wrong inference. Results reveal instead that, in Italy, there is no incidence of both coupled and decoupled payments.

Suggested Citation

  • Guastella, Gianni & Moro, Daniele & Sckokai, Paolo & Veneziani, Mario, 2014. "The capitalization of area payments into land rental prices: a panel sample selection approach," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 186375, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae14:186375
    DOI: 10.22004/ag.econ.186375
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    Citations

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    Cited by:

    1. Demartini, Eugenio & Gaviglio, Anna & Gelati, Marco & Cavicchioli, Daniele, 2016. "The Lords of the Rent," 149th Seminar, October 27-28, 2016, Rennes, France 245705, European Association of Agricultural Economists.
    2. H. Allen Klaiber & Klaus Salhofer & Stanley R. Thompson, 2017. "Capitalisation of the SPS into Agricultural Land Rental Prices under Harmonisation of Payments," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(3), pages 710-726, September.
    3. Pavel Ciaian & Dusan Drabik & Jan Falkowski & d'Artis Kancs, 2016. "Market Impacts of New Land Market Regulations in Eastern EU Member States," EERI Research Paper Series EERI RP 2016/02, Economics and Econometrics Research Institute (EERI), Brussels.
    4. repec:zbw:inwedp:622016 is not listed on IDEAS
    5. Pavel Ciaian & d'Artis Kancs & Maria Espinosa, 2016. "The Impact of the 2013 CAP Reform on the Decoupled Payments' Capitalization into Land Values," JRC Research Reports JRC101619, Joint Research Centre.
    6. Eugenio Demartini & Anna Gaviglio & Marco Gelati & Daniele Cavicchioli, 2016. "The Effect of Biogas Production on Farmland Rental Prices: Empirical Evidences from Northern Italy," Energies, MDPI, vol. 9(11), pages 1-23, November.
    7. Matthews, Alan & Salvatici, Luca & Scoppola, Margherita, 2017. "Trade Impacts of Agricultural Support in the EU," Commissioned Papers 252767, International Agricultural Trade Research Consortium.
    8. H. Allen Klaiber & Klaus Salhofer & Stanley R. Thompson, 2017. "Capitalisation of the SPS into Agricultural Land Rental Prices under Harmonisation of Payments," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(3), pages 710-726, September.
    9. Koemle, Dieter & Lakner, Sebastian & Yu, Xiaohua, 2019. "The impact of Natura 2000 designation on agricultural land rents in Germany," Land Use Policy, Elsevier, vol. 87(C).
    10. Luigi Biagini & Simone Severini, 2021. "The role of Common Agricultural Policy (CAP) in enhancing and stabilising farm income: an analysis of income transfer efficiency and the Income Stabilisation Tool," Papers 2104.14188, arXiv.org.

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    Keywords

    Agricultural and Food Policy; Land Economics/Use; Resource /Energy Economics and Policy;
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