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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. We adopt a hedonic pricing model under incomplete information to analyze a comprehensive data set with more than 10,000 transactions between 2014{2017 in the Eastern German state Saxony-Anhalt. Estimation employs a two-tiered stochastic frontier to capture deviations from the ecient price due to search costs asymmetrically distributed between buyers and sellers. Relating these costs to the degree of professionalism, we nd institutional sellers relying on public tenders to achieve the lowest losses from being information decient. For buyers, we nd informational advantages in particular for farmers that are also tenants, while non-tenant farmers have only advantages for large transactions.

Suggested Citation

  • Kahle, Christoph & Seifert, Stefan & Hüttel, Silke, 2019. "Price dispersion in thin farmland markets: What is the role of asymmetric information?," 8th EAAE PhD Workshop, June 10 – 12, 2019, Uppsala, Sweden 296797, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaaph8:296797
    DOI: 10.22004/ag.econ.296797
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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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