Exploring long-term land improvements under land tenure insecurity

Sami Myyrä and Kyosti Pietola

No 31954, 2006 Conference, August 24-25, 2006, Nelson, New Zealand from New Zealand Agricultural and Resource Economics Society

Abstract: This article explores long-term land improvement (lime application) under land tenure insecurity on leased land. The dynamic optimisation problem is solved by a stochastic dynamic programming routine with known parameters for one-period returns and transition equations. The model parameters represent Finnish soil quality and production conditions. The farmer's decision rules are solved for alternative likelihood scenarios over the continuation of the fixed term lease contract. The results suggest that, as the probability for non-renewal of the lease contract increases, farmers quickly decrease investments in irreversible land improvement and, thereafter, yields decline gradually. The estimated decision rules are a part of larger set of farmer's decision rules to be taken care when land leasing and environmental legislation is renewed.

Keywords: Land; Economics/Use (search for similar items in EconPapers)
Pages: 9
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: Exploring long-term land improvements under land tenure insecurity (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nzasin:31954

DOI: 10.22004/ag.econ.31954

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