Land Prices and Climate Conditions - Evaluating the Greenhouse Damage for the German Agricultural Sector

Günter Lang ()

No 233, Discussion Paper Series from Universitaet Augsburg, Institute for Economics

Abstract: Using an exhaustive panel dataset of the German agricultural sector, this paper is evaluating the relationship between climate conditions and land prices. The main advantage of this so-called hedonic approach is the consideration of the full range of adaptation options to the climatic environment. A Box-Cox form is employed to allow for very flexible relationships between land prices, warmth, moisture, and different socioeconomic variables. In a second step, the estimated results are used to forecast the impact of global climate change on the farming sector. The results show that a change of the temperature level has stronger impacts than a change of rainfall. Using a greenhouse warming scenario, German farmers are expected to be winners of climate change at least in the short run. Maximum gains are estimated with a temperature increase of +1.0°C against the current levels. Should the temperature increase surpass 1.8°C, however, the impact on the farming sector is clearly negative.

Keywords: agriculture; farming land; hedonic approach; climate change; environmental valuation; global warming; impact study (search for similar items in EconPapers)
JEL-codes: Q12 Q25 (search for similar items in EconPapers)
Date: 2003-01
New Economics Papers: this item is included in nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:aug:augsbe:0233

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