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Price dispersion in thin farmland markets: What is the role of asymmetric information?

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  • Kahle, Christoph
  • Seifert, Stefan
  • Hüttel, Silke

Abstract

This paper investigates the role of information and search cost in the price formation in farmland markets. Using a comprehensive data set with more than 10,000 transactions between 2014–2017 in one of the eastern German Federal States, we estimate a two-tier model to capture price effects induced by asymmetrically distributed search cost between buyers and sellers. By relating these costs to the degree of professionalism, we can identify relative price effects and institutional sellers to sell at the lowest cost of being information deficient. No price differences can be indentified by contrasting farmers and non-farmers.

Suggested Citation

  • Kahle, Christoph & Seifert, Stefan & Hüttel, Silke, 2019. "Price dispersion in thin farmland markets: What is the role of asymmetric information?," 59th Annual Conference, Braunschweig, Germany, September 25-27, 2019 292320, German Association of Agricultural Economists (GEWISOLA).
    • Handle: RePEc:ags:gewi19:292320
    DOI: 10.22004/ag.econ.292320
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    File URL: https://ageconsearch.umn.edu/record/292320/files/C3-116-Kahle-Price_dispersion_in_thin_farmland_markets_c.pdf
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    Cited by:

    1. Seifert, Stefan & Hüttel, Silke, 2020. "Common values and unobserved heterogeneity in farmland auctions in Germany," FORLand Working Papers 21 (2020), Humboldt University Berlin, DFG Research Unit 2569 FORLand "Agricultural Land Markets – Efficiency and Regulation".

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    Land Economics/Use;

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