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Forced Sales And Farmland Prices


  • Huttel, Silke
  • Jetzinger, Simon
  • Odening, Martin


In this paper we analyse agricultural land prices in the state Brandenburg. Our objective is to understand the price formation in foreclosures. Knowledge of the impact of foreclosures is desirable for the determination of mortgage lending values. The effect of foreclosures can be decomposed into two parts. First, the effect of a pressured sale, which will likely reduce the realized price compared with an unpressured sale and second, the effect of an auction, which may lead to a price premium. The empirical analysis is based on a rich data set of land prices in Brandenburg between 2000 and 2011 provided by the “Oberer Gutachterausschuss für Grundstückswerte”. The treatment effect of forced sales is derived by means of a statistical matching approach. Our results show that on average prices premia rather than price discounts are realized in forced sales of agricultural land. The price differential between forced and nonforced sales, however, is not constant but depends on the land market conditions.

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  • Huttel, Silke & Jetzinger, Simon & Odening, Martin, 2012. "Forced Sales And Farmland Prices," 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 133413, German Association of Agricultural Economists (GEWISOLA).
  • Handle: RePEc:ags:gewi12:133413

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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


    Forced sales; land prices; treatment effect; Zwangsversteigerung; Landpreise; Treatmenteffekt; Agricultural and Food Policy; Financial Economics; Land Economics/Use;

    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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