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Determinants of Agricultural Cash Rents in Germany: A Spatial Econometric Analysis for Farm-Level Data

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  • Breustedt, Gunnar
  • Habermann, Hendrik

Abstract

This article analyses determinants for 2001 farmland rental prices from 4376 farms in Germany. We derive our regression equation from a spatial reaction function to allow for spatial transmission of rental prices. Results from a general spatial model show that a € 1 per hectare higher rental price in a farmer’s neighbourhood coincides with a € 0.57 higher rental price he has to pay. For policy evaluation we estimate the marginal incidence of regional EU per-hectare premiums. We find a value significantly above one and propose an explanation for this counterintuitive result based on the long-running nature of rental contracts, simultaneity of premium introduction and intervention price cuts as well as assumed stickiness of rental prices. Regional livestock density, which is indirectly influenced by different policies, is also a major determinant of rental prices.

Suggested Citation

  • Breustedt, Gunnar & Habermann, Hendrik, 2009. "Determinants of Agricultural Cash Rents in Germany: A Spatial Econometric Analysis for Farm-Level Data," 2009 Conference, August 16-22, 2009, Beijing, China 51685, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae09:51685
    DOI: 10.22004/ag.econ.51685
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    Cited by:

    1. Alexander März & Nadja Klein & Thomas Kneib & Oliver Musshoff, 2016. "Analysing farmland rental rates using Bayesian geoadditive quantile regression," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 43(4), pages 663-698.
    2. Breustedt, Gunnar & Habermann, Hendrik, 2010. "Einfluss Der Biogaserzeugung Auf Landwirtschaftliche Pachtpreise In Deutschland," 50th Annual Conference, Braunschweig, Germany, September 29-October 1, 2010 93937, German Association of Agricultural Economists (GEWISOLA).
    3. Richard T. Gudaj & Fujin Yi & Svetlana Mishchuk & Tatiana A. Potenko & Ivan Zuenko & Zvi Lerman, 2020. "Impact of Chinese Agribusiness Entrepreneurs on the Local Land Market in the Russian Far East," American Journal of Economics and Sociology, Wiley Blackwell, vol. 79(5), pages 1417-1454, November.
    4. Ferenc, Buzás & László, Posta & Sándor, Kiss & István, Mező, 2017. "Determining Fair Rental Value Of Land In The Hungarian Valuation Practice – A Methodological Approach," APSTRACT: Applied Studies in Agribusiness and Commerce, AGRIMBA, vol. 11(3-4), December.
    5. David Sedik & Fujin Yi & Richard T. Gudaj, 2020. "Implications of Chinese Farmers in the Russian Far East," American Journal of Economics and Sociology, Wiley Blackwell, vol. 79(5), pages 1615-1622, November.

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