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Effects of volatile output prices on agricultural land-use change

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Listed:
  • Boere, Esther
  • Peerlings, Jack H.M.
  • Reinhard, Stijn
  • Kuhlman, Tom
  • Heijman, Wim J.M.

Abstract

Volatile output prices lead to a fluctuating shadow price (profitability) of agricultural land, and therefore may impact land use decisions in case of risk-averse behaviour. In this paper we assess the effect of volatile agricultural output prices on agricultural land-use change over the past decade in the Netherlands. Using regional data from 2000 through 2009, the number of hectares of land for 10 land uses was calculated. To determine the joint distribution of agricultural activities, hectares of land for each land use were converted to land share equations. Land share equations were estimated to determine the contribution of increased price volatility to land use change. Results show that larger volatility affects land shares negatively. Producer’s output responses, therefore, were consistently affected by risk-averse behaviour.

Suggested Citation

  • Boere, Esther & Peerlings, Jack H.M. & Reinhard, Stijn & Kuhlman, Tom & Heijman, Wim J.M., 2012. "Effects of volatile output prices on agricultural land-use change," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122472, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa123:122472
    DOI: 10.22004/ag.econ.122472
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    References listed on IDEAS

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