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The Effect of Heterogeneous Buyers on Agricultural Land Prices: The Case of the Czech Land Market

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  • Curtiss, Jarmila
  • Jelínek, Ladislav
  • Hruška, Martin
  • Medonos, Tomáš
  • Vilhelm, Václav

Abstract

This paper analyses how different types of buyers affect the farmland price. We specify a flexible hedonic land pricing model that allows for non-uniform valuation of land characteristics among buyers. Data on 579 land sale contracts from five districts of the Czech Republic from 2008-2010 are utilised in the study. The results provide strong evidence of buyerspecific valuation of land’s productive and site characteristics as well as systemic differences in land market conditions among groups of buyers, both of which affect the land price. Non-agricultural buyers are observed to significantly overbid agricultural buyers on land location and site characteristics rather than productive qualities. Among agricultural buyers, joint stock companies and cooperatives enjoy major land price discounts, while individual private farms and limited liability companies face land market access constraints that are surmountable only through paying high price premiums. These observations have important implications for future land ownership structure and land use efficiency. Der Aufsatz analysiert, wie unterschiedliche Typen von Käufern den Bodenpreis beeinflussen. Wir spezifizieren ein flexibles hedonisches Bodenpreis-Modell, das Unterschiede in der Bewertung von Bodeneigenschaften durch verschiedene Käufer erfasst. Daten aus 579 Verträgen zu Bodenkäufern aus fünf tschechischen Landkreisen der Jahre 2008 bis 2011 liegen der Analyse zugrunde. Die Ergebnisse liefern eindeutige Belege, dass sowohl käuferspezifische Bewertungen der Bodenproduktivität und Standorteigenschaften als auch systematische Unterschiede in den Marktbedingungen zwischen den Gruppen von Käufern den Preis beeinflussen. Nichtlandwirtschaftliche Käufer bieten signifikant höhere Preise als Käufer mit einem landwirtschaftlichen Hintergrund, dabei achten sie weniger auf die Bodenqualität, sondern schätzen mehr die Lage und andere Standortcharakteristika. Bei den landwirtschaftlichen Käufern werden Aktiengesellschaften und Genossenschaften oft große Preisnachlässe gewährt. Privatlandwirte und GmbHs sehen sich dagegen Beschränkungen im Zugang zum Bodenmarkt ausgesetzt, die nur durch Zahlung von signifikanten Preisprämien überwindbar sind. Diese Ergebnisse haben wichtige Implikationen für die zukünftige Bodeneigentumsstruktur und Effizienz der Bodennutzung.

Suggested Citation

  • Curtiss, Jarmila & Jelínek, Ladislav & Hruška, Martin & Medonos, Tomáš & Vilhelm, Václav, 2013. "The Effect of Heterogeneous Buyers on Agricultural Land Prices: The Case of the Czech Land Market," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 62(02), pages 1-18, May.
    • Handle: RePEc:ags:gjagec:232336
    DOI: 10.22004/ag.econ.232336
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    References listed on IDEAS

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    Cited by:

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    2. Ritter, Matthias & Hüttel, Silke & Odening, Martin & Seifert, Stefan, 2019. "Revisiting the relationship between land price and parcel size," FORLand Working Papers 08 (2019), Humboldt University Berlin, DFG Research Unit 2569 FORLand "Agricultural Land Markets – Efficiency and Regulation".
    3. Stefan Seifert & Christoph Kahle & Silke Hüttel, 2021. "Price Dispersion in Farmland Markets: What Is the Role of Asymmetric Information?," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(4), pages 1545-1568, August.
    4. B. James Deaton & Chad Lawley, 2022. "A survey of literature examining farmland prices: A Canadian focus," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 70(2), pages 95-121, June.
    5. Plogmann, Jana & Mußhoff, Oliver & Odening, Martin & Ritter, Matthias, 2022. "Farm growth and land concentration," Land Use Policy, Elsevier, vol. 115(C).
    6. Carsten Croonenbroeck & Martin Odening & Silke Hüttel, 2020. "Farmland values and bidder behaviour in first-price land auctions [Identification of standard auction models]," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 47(2), pages 558-590.
    7. Kionka, Marlene & Kuethe, Todd H. & Musshoff, Oliver & Odening, Martin & Ritter, Matthias, 2022. "Bargaining Power in the Agricultural Land Rental Market," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322186, Agricultural and Applied Economics Association.
    8. Myrna, Olena, 2023. "Competition in online land lease auctions in Ukraine: Reduced-form estimation," Land Use Policy, Elsevier, vol. 125(C).
    9. Marlene Kionka, Todd Kuethe, Oliver Mußhoff, Matthias Ritter, Martin Odening, 2022. "Bargaining Power in the Agricultural Land Market," 2022 Agricultural and Rural Finance Markets in Transition, October 17-18, 2022, Detroit, Michigan 329249, Regional Research Committee NC-1177 (formerly NC-1014): Agricultural and Rural Finance Markets in Transition.
    10. Maximilian Humpesch & Stefan Seifert & Alfons Balmann & Silke Hüttel, 2022. "How does tenancy affect farmland prices? Effects of lease status, lease term and buyer type," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 83(2), pages 242-263, September.
    11. Ludo Peeters & Eloi Schreurs & Steven Passel, 2017. "Heterogeneous Impact of Soil Contamination on Farmland Prices in the Belgian Campine Region: Evidence from Unconditional Quantile Regressions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(1), pages 135-168, January.
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