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Price Formation on Land Market Auctions in East Germany – An Empirical Analysis

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  • Huettel, Silke
  • Odening, Martin
  • Kataria, Karin
  • Balmann, Alfons

Abstract

Although determinants of agricultural land prices have received considerable attention in the literature, little is known about price formation on structured markets such as land auctions. This paper aims to empirically test theoretical predictions regarding price formation in land market auctions. The analysis is conducted for the case of Saxony-Anhalt, Germany, where state-owned land constitutes a significant share of the agricultural land market. The utilised data consists of public auction data provided by the Landgesellschaft Sachsen-Anhalt (i.e. the rural development agency in Saxony-Anhalt), and covers approximately 700 calls for bids from 2003 to 2010, supplemented with regional and structural data. Spatial correlation of land prices is considered by applying a spatial econometrics approach. Our analysis shows that apart from land characteristics, the number of bidders and the share of non-agricultural investors have an impact on the land price. Der landwirtschaftliche Bodenmarkt ist Gegenstand zahlreicher empirischer Analysen, und es ist weitgehend unstrittig, welches die hauptsächlichen Preisdeterminanten sind. Allerdings ist wenig über die Preisbildung in strukturierten Märkten bekannt, beispielsweise Auktionen mit öffentlichen Ausschreibungen. Ziel dieser Studie ist es, auf Basis der Auktionspreistheorie Hypothesen über die Wirkung auktionsspezifischer Preisdeterminanten herzuleiten und empirisch zu prüfen. Die Analyse wird exemplarisch für Sachsen-Anhalt durchgeführt, da in diesem Bundesland die Landgesellschaft Sachsen-Anhalt im Rahmen des Privatisierungsprozesses der ehemals volkseigenen Flächen als institutioneller Anbieter auf dem Bodenmarkt agiert und öffentlich ausschreibt. Der verwendete Datensatz umfasst circa 700 Ausschreibungen im Zeitraum von 2003 bis 2010, die mit strukturellen Daten aus der Regionalstatistik angereichert werden. Unter Berücksichtigung von räumlicher Korrelation der Preise mittels räumlich-ökonometrischer Methoden kann gezeigt werden, dass zum einen die Eigenschaften des Flächenloses, wie zum Beispiel die Bodenqualität, und zum anderen auktionsspezifische Variablen, wie die Anzahl der Gebote sowie der Anteil nicht-landwirtschaftlicher Bieter, den Preis signifikant beeinflussen.

Suggested Citation

  • Huettel, Silke & Odening, Martin & Kataria, Karin & Balmann, Alfons, 2013. "Price Formation on Land Market Auctions in East Germany – An Empirical Analysis," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 62(02), pages 1-17, May.
    • Handle: RePEc:ags:gjagec:232335
    DOI: 10.22004/ag.econ.232335
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    2. Emmann, Carsten & Surmann, Dennis & Theuvsen, Ludwig, 2015. "Charakterisierung und Bedeutung außerlandwirtschaftlicher Investoren – Empirische Ergebnisse aus Sicht des landwirtschaftlichen Berufsstandes," Department of Agricultural and Rural Development (DARE) Discussion Papers 260787, Georg-August-Universitaet Goettingen, Department of Agricultural Economics and Rural Development (DARE).
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    14. Isenhardt, Lars & Seifert, Stefan & Hüttel, Silke, 2021. "On the price effect of a right of first refusal in farmland auctions," 61st Annual Conference, Berlin, Germany, September 22-24, 2021 317062, German Association of Agricultural Economists (GEWISOLA).
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    16. 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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