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Price dispersion in thin farmland markets: What is the role of asymmetric information?

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  • Kahle, Christoph
  • Seifert, Stefan
  • Hüttel, Silke

Abstract

This paper investigates the role of information and search cost in the price formation in thin farmland markets. Using a comprehensive data set with more than 10,000 transactions between 2014–2017 in one of the eastern German Federal States, we estimate a two-tier model to capture deviations from the efficient price due to search costs asymmetrically distributed between buyers and sellers. Relating these costs to the degree of professionalism, we find institutional sellers relying on public tenders to achieve the lowest losses from being information deficient. No differences can be related to farmer compared to non-farmer buyers.

Suggested Citation

  • Kahle, Christoph & Seifert, Stefan & Hüttel, Silke, 2019. "Price dispersion in thin farmland markets: What is the role of asymmetric information?," 165th Seminar, April 4-5, 2019, Berlin, Germany 288628, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa165:288628
    DOI: 10.22004/ag.econ.288628
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    Cited by:

    1. Seifert, Stefan & Hüttel, Silke, 2020. "Common values and unobserved heterogeneity in farmland auctions in Germany," FORLand Working Papers 21 (2020), Humboldt University Berlin, DFG Research Unit 2569 FORLand "Agricultural Land Markets – Efficiency and Regulation".

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    Land Economics/Use;

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