The term structure of land lease rates

Martin Odening, Matthias Ritter and Silke Hüttel

No 201664, 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California from Agricultural and Applied Economics Association

Abstract: This paper applies the concept of a term structure to agricultural land rental prices. Based on theoretical considerations, we develop a hedonic pricing model that allows for different shapes of the term structure curve while controlling for other price-relevant characteristics. We apply this model to land lease contracts in Saxony-Anhalt concluded between 2002 and 2010. We find an upward-sloping term structure at the beginning, that is, market participants expected increasing rental prices. For the subsequent years, however, we detect a single-humped term structure. Hence, market participants revised their expectations and assumed a decline of land rental prices in the long-term.

Keywords: Demand and Price Analysis; Farm Management; Land Economics/Use (search for similar items in EconPapers)
Pages: 22
Date: 2015
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea15:201664

DOI: 10.22004/ag.econ.201664

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