The role of farmers’ competition on farmland price in local markets: Bretagne region of France

Chalachew Temesgen and Pierre Dupraz

No 170610, 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota from Agricultural and Applied Economics Association

Abstract: We introduce the local farmland market concepts in order to understand the operation of French farmland sale market. We perform an empirical analysis of farmland prices based on farmland sale market in the Bretagne Region of France. The descriptive statistics show that the price of farmer to farmer transactions is significantly higher than the non-farmer to non-farmer transactions by almost €830/ha. The log-linear estimations indicate that farmer sellers have higher bargaining power than non-farmer sellers. Because of the competition between farmers, when the sold area share of farmers increases by 50% at the municipality level, the price increases by €488/ha. Symmetric significant effect is measured on the demand side. For example, if the traded area share of farmers increases by 50% in the municipality, the price decreases by €172 /ha. The result on the supply side of traded land also reflects the higher willingness to accept (WTA) of farmers and the result on the demand side reflects a pure market power effect, since the farmers’ willingness to pay (WTP) is usually higher than non-farmers’ WTP.

Keywords: Demand and Price Analysis; Land Economics/Use; Marketing (search for similar items in EconPapers)
Pages: 35
Date: 2014
New Economics Papers: this item is included in nep-agr
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea14:170610

DOI: 10.22004/ag.econ.170610

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