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Rents and Land Prices in Japan: A Panel Cointegration Approach

Author

Listed:
  • Ana I. Sanjuán
  • Philip J. Dawson
  • Lionel J. Hubbard
  • Sawako Shigeto

Abstract

The Japanese farmland market is strongly regulated, although partial deregulation and decentralization are evident. This paper examines the relationship between farmland rents and prices in Japan using recent panel cointegration methods, which admit structural breaks. Results show the presence of a cointegrating relationship with significant breaks that increased the rent/price ratio by 9% in 1967 and by 15% in 1980; prices cause rents, which supports an institutional rent-formation hypothesis; and the farmland market is inefficient.

Suggested Citation

  • Ana I. Sanjuán & Philip J. Dawson & Lionel J. Hubbard & Sawako Shigeto, 2009. "Rents and Land Prices in Japan: A Panel Cointegration Approach," Land Economics, University of Wisconsin Press, vol. 85(4), pages 587-597.
    • Handle: RePEc:uwp:landec:v:85:y:2009:i:4:p:587-597
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    References listed on IDEAS

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    1. Joakim Westerlund, 2006. "Testing for Panel Cointegration with Multiple Structural Breaks," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(1), pages 101-132, February.
    2. Sergio H. Lence & Douglas J. Miller, 1999. "Transaction Costs and the Present Value Model of Farmland: Iowa, 1900–1994," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(2), pages 257-272.
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    4. Falk, Barry L., 1991. "Formally Testing the Present Value Model of Farmland Prices," Staff General Research Papers Archive 11093, Iowa State University, Department of Economics.
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    6. David Canning & Peter Pedroni, 2008. "Infrastructure, Long‐Run Economic Growth And Causality Tests For Cointegrated Panels," Manchester School, University of Manchester, vol. 76(5), pages 504-527, September.
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    Cited by:

    1. Alexey Akimov & Simon Stevenson & James Young, 2015. "Synchronisation and commonalities in metropolitan housing market cycles," Urban Studies, Urban Studies Journal Limited, vol. 52(9), pages 1665-1682, July.
    2. Hotopp, Henning & Mußhoff, Oliver, 2012. "Can rent adjustment clauses reduce the income risk of farms?," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 1(4), pages 1-10, July.

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    More about this item

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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