Does COVID-19 Affect Farmland Prices? How and Why?

Brian Lee, Po-Yuan Cheng, Lih-Chyun Sun, Yi-Ting Hsieh and Hung-Hao Chang
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Brian Lee: Program in Science, Technology and Environmental Policy, Princeton University, Princeton, NJ 08544, USA
Po-Yuan Cheng: Department of Leisure and Recreation Management, Taipei City University, Taipei 11230, Taiwan
Lih-Chyun Sun: Department of Urban Industrial Management and Marketing, University of Taipei, Taipei 10048, Taiwan
Yi-Ting Hsieh: Department of Agricultural Economics, National Taiwan University, Taipei 10617, Taiwan

Agriculture, 2022, vol. 12, issue 12, 1-12

Abstract: COVID-19 has profoundly impacted the global economy, particularly the agricultural sector. However, relatively little attention has been paid to the relationship between COVID-19 and the farmland market. A few descriptive studies have speculated about the impact of COVID-19 on farmland prices but presented no quantitative evidence. This study provides quantitative evidence on the causal effect of COVID-19 on farmland prices using the difference-in-differences method with population-based data on farmland transactions in Taiwan. While prior descriptive studies argued that increased farmland prices associated with COVID-19 were largely driven by macroeconomic conditions, we found that the onset of COVID-19 increased farmland prices by 5.1%, even after controlling for macroeconomic conditions and parcel-level farmland characteristics. Furthermore, we found that government payments are likely responsible for these increases in farmland prices. Financial assistance easing the economic burdens of the agricultural sector can also stabilize farmland prices.

Keywords: farmland prices; administrative data; COVID-19; government payments (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2022
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