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Impacts of Agri-Environmental Policies on Land Allocation and Land Prices

  • Guyomard, Herve
  • Lankoski, Jussi E.
  • Ollikainen, Markku

We develop a Ricardian framework with heterogeneous land quality to analyse the effects of agricultural and agri-environmental support policies on land allocation decisions and land prices. Four agri-environmental policy instruments are considered: a uniform area payment, a quality-dependent area payment, a mandatory buffer strip policy and a voluntary buffer strip payment. We also analyse how general tax and monetary policies may affect agricultural land prices. The theoretical framework is illustrated by an empirical model applied to Finnish agriculture. The empirical model shows that macroeconomic factors, such as general tax and monetary policies, may exert a greater impact on land prices than some minor fine-tuning in agrienvironmental policies.

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File URL: http://purl.umn.edu/25310
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Paper provided by International Association of Agricultural Economists in its series 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia with number 25310.

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Date of creation: 2006
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Handle: RePEc:ags:iaae06:25310
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  1. Barry K. Goodwin & Ashok K. Mishra & Fran�ois N. Ortalo-Magné, 2003. "What's Wrong with Our Models of Agricultural Land Values?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(3), pages 744-752.
  2. Jussi Lankoski & Markku Ollikainen, 2003. "Agri-environmental externalities: a framework for designing targeted policies," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 30(1), pages 51-75, March.
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