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Capitalization of the Single Payment Scheme into Land Value: Generalized Propensity Score Evidence from the EU

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  • Michalek, Jerzy
  • Ciaian, Pavel
  • Kancs, d'Artis

Abstract

This is the first paper which empirically estimates the capitalization of the Single Payment Scheme (SPS) into land values. Although, the Single Payment Scheme (SPS) is the largest expenditure category in the EU budget, the distributional impacts between land users and land owners have not been assessed empirically yet. We employ a unique farm-level panel data set, and apply the generalized propensity score matching approach to estimate the capitalization of the SPS in EU. Our results suggest that around 6-10 percent of the total SPS are capitalized into land rents. On average in the EU, the non-farming landowners' gains from the SPS are only 4 percent. However, there is a large variation in the capitalization rate for different SPS levels, and between different Member States (3 to 94 percent).

Suggested Citation

  • Michalek, Jerzy & Ciaian, Pavel & Kancs, d'Artis, 2014. "Capitalization of the Single Payment Scheme into Land Value: Generalized Propensity Score Evidence from the EU," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 186378, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae14:186378
    DOI: 10.22004/ag.econ.186378
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    Keywords

    Agricultural and Food Policy; Land Economics/Use;

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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