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An empirical model of the U.K. land market and the impact of price policy on land values and rents

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  • BRUCE TRAILL

Abstract

With a view to examining the impact of E.C. product price changes on land values and rents in the U.K., econometric models are developed to show the effect of farm incomes on these variables. The long-run effect conforms closely with the often expressed theoretical view that the benefits of farm support policies are capitalised into higher land values. The elasticity of net farm income with respect to product prices is then calculated and, combined with coefficient estimates from the econometric models, indicates that a 1% increase in product prices would, ceteris paribus, raise land prices by about 10% and rents by almost 30% in the long run.

Suggested Citation

  • Bruce Traill, 1979. "An empirical model of the U.K. land market and the impact of price policy on land values and rents," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 6(2), pages 209-232.
    • Handle: RePEc:oup:erevae:v:6:y:1979:i:2:p:209-232.
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    File URL: http://hdl.handle.net/10.1093/erae/6.2.209
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    Cited by:

    1. G. F. Ortmann, 1987. "Land Rents and Production Costs in the South African Sugar Industry," South African Journal of Economics, Economic Society of South Africa, vol. 55(3), pages 163-169, September.
    2. Baranyai, Zsolt & Vinogradov, Szergej & Vásáry, Miklós & Naárné Tóth, Zsuzsanna, 2014. "Regional Study Of The Land Price And Land Value In Hungary – Based On The Experience Of Farm Accounting Data Network," Acta Carolus Robertus, Karoly Robert University College, vol. 4(2), pages 1-6.
    3. Offutt, Susan & Shoemaker, Robbin, 1989. "Distribution of Domestic Policy Benefits and the Willingness to Support Trade Liberalization," 1989 Occasional Paper Series No. 5 197669, International Association of Agricultural Economists.
    4. 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.
    5. Feichtinger, Paul & Salhofer, Klaus, 2013. "What Do We Know about the Influence of Agricultural Support on Agricultural Land Prices?," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 62(02), pages 1-15, May.
    6. D. Hallam & F. Machado & G. Rapsomanikis, 1992. "Co‐Integration Analysis And The Determinants Of Land Prices," Journal of Agricultural Economics, Wiley Blackwell, vol. 43(1), pages 28-37, January.
    7. Maurice J. Roche & Kieran McQuinn, 2000. "Speculation in agricultural land," Economics Department Working Paper Series n1010700, Department of Economics, National University of Ireland - Maynooth.
    8. Oltmer, Katrin & Florax, Raymond J.G.M., 2001. "Impacts Of Agricultural Policy Reform On Land Prices: A Quantitative Analysis Of The Literature," 2001 Annual meeting, August 5-8, Chicago, IL 20507, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Unknown, 1990. "Land Market And Farm Incomes In Italy," Staff Papers 14296, University of Minnesota, Department of Applied Economics.
    10. Freebairn, John W., 1981. "Assessing Some Effects Of Inflation On The Agricultural Sector," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 25(2), pages 1-16, August.
    11. Henning Schaak & Oliver Musshoff, 2022. "The distribution of the rent–price relationship of agricultural land in Germany," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 49(3), pages 696-718.
    12. Schaak, Henning & Mußhoff, Oliver, 2020. "A geoadditive distributional regression analysis of the local relationship of land prices and land rents in Germany," FORLand Working Papers 20 (2020), Humboldt University Berlin, DFG Research Unit 2569 FORLand "Agricultural Land Markets – Efficiency and Regulation".
    13. Feichtinger, Paul & Salhofer, Klaus, 2013. "What Do We Know about the Influence of Agricultural Support on Agricultural Land Prices?," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 62(2).
    14. Rob Fraser, 1997. "Land Heterogeneity And The May 1992 Reform Of Cap Cereal Price Support," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1‐3), pages 65-70, January.

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