Farmland Rental Rate and Marginal Return to Land: A French FADN Perspective

Pierre Dupraz and Chalachew Temesgen

No 134954, 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK from Agricultural Economics Society

Abstract: The paper examines the relationship between the cash rent and the shadow value of farmland to understand the French farmland market. The empirical analysis is restricted to French main grain crops, namely wheat, oil crops and other grain crops. The sample is an unbalanced panel of 35,089 observations, that includes 6,089 crop farms which are observed about 5 years each, during the period 1990 -2007. The shadow values of all quasi-fixed assets have been derived from a restricted variable profit function. The profit function was successively estimated and tested by three estimation strategies: pooled OLS, one-way fixed effect and random panel model. However, concluding remarks are based on the results of the fixed effect model because of its statistical significance. The result indicates that the shadow prices of land and labour were persistently diverging from there observed price. The average shadow value of farmland was estimated about 550€/ha/year which is five times higher than the average rental price of 112€/ha/year over the studied period. Implication for the behaviours of French farmland market has been drawn from this analysis.

Keywords: Land; Economics/Use (search for similar items in EconPapers)
Pages: 21
Date: 2012-04
New Economics Papers: this item is included in nep-agr
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Citations: View citations in EconPapers (7)

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Working Paper: Farmland rental rate and marginal return to land: A french FADN perspective (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aesc12:134954

DOI: 10.22004/ag.econ.134954

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