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Capitalization of the Single Payment Scheme into Land Value: Generalized Propensity Score Evidence from the European Union

Jerzy Michalek, Pavel Ciaian and d'Artis Kancs

Land Economics, 2014, vol. 90, issue 2

Abstract: This paper estimates the capitalization of the single payment scheme (SPS) into land values. The theory suggests a nonlinear and discontinuous relationship between the SPS and land rents. In empirical analysis we employ unique farm-level panel data and apply the generalized propensity score matching approach. Our estimates suggest a 6% to 10% SPS capitalization rate. On average in the European Union, the nonfarming landowners’ gains from the SPS are only 4%. However, there is a large variation in the capitalization rate for different SPS levels and between different member states (3% to 94%).

JEL-codes: H23 Q15 (search for similar items in EconPapers)
Date: 2014
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Related works:
Working Paper: Capitalization of the Single Payment Scheme into Land Value: Generalized Propensity Score Evidence from the EU (2014) Downloads
Working Paper: SPS Capitalization into Land Value: Generalized Propensity Score Evidence from the EU (2011) Downloads
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