FORCED SALES AND FARMLAND PRICES

Silke Huttel, Simon Jetzinger and Martin Odening

No 133413, 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 from German Association of Agricultural Economists (GEWISOLA)

Abstract: In this paper we analyse agricultural land prices in the state Brandenburg. Our objective is to understand the price formation in foreclosures. Knowledge of the impact of foreclosures is desirable for the determination of mortgage lending values. The effect of foreclosures can be decomposed into two parts. First, the effect of a pressured sale, which will likely reduce the realized price compared with an unpressured sale and second, the effect of an auction, which may lead to a price premium. The empirical analysis is based on a rich data set of land prices in Brandenburg between 2000 and 2011 provided by the “Oberer Gutachterausschuss für Grundstückswerte”. The treatment effect of forced sales is derived by means of a statistical matching approach. Our results show that on average prices premia rather than price discounts are realized in forced sales of agricultural land. The price differential between forced and nonforced sales, however, is not constant but depends on the land market conditions.

Keywords: Agricultural and Food Policy; Financial Economics; Land Economics/Use (search for similar items in EconPapers)
Pages: 15
Date: 2012
New Economics Papers: this item is included in nep-agr
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Related works:
Journal Article: Forced Sales and Farmland Prices (2014)
Working Paper: Forced Sales and Farmland Prices (2013)
Working Paper: Forced Sales and Farmland Prices (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:gewi12:133413

DOI: 10.22004/ag.econ.133413

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