Effects of volatile output prices on agricultural land-use change

Esther Boere, Jack H.M. Peerlings, Stijn Reinhard, Tom Kuhlman and Wim J.M. Heijman

No 122472, 123rd Seminar, February 23-24, 2012, Dublin, Ireland from European Association of Agricultural Economists

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.

Keywords: Risk; and; Uncertainty (search for similar items in EconPapers)
Pages: 12
Date: 2012-02-23
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaa123:122472

DOI: 10.22004/ag.econ.122472

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