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What moves farmland markets: decomposing the price surge in eastern Germany

Author

Listed:
  • Tim Hainbach
  • Silke Hüttel
  • Axel Werwatz

Abstract

Farmland prices have been surging worldwide; yet little is known about the particular strong surges in the upper quantiles of price distribution. We investigate by quantile how the composition of the farmland sales and agents’ valuation of land characteristics contribute to these price developments. Using farmland transactions from Brandenburg, Germany, we decompose the price surges between 2008–09 and 2017–18 by combining unconditional quantile regressions with propensity score reweighting. Our results show an increased valuation of land characteristics, e.g. soil quality, and their responsibility for about 25% of the price surges in the upper (>75%) quantiles of price distribution.

Suggested Citation

  • Tim Hainbach & Silke Hüttel & Axel Werwatz, 2024. "What moves farmland markets: decomposing the price surge in eastern Germany," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 51(4), pages 967-1011.
    • Handle: RePEc:oup:erevae:v:51:y:2024:i:4:p:967-1011.
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