Land Improvements Under Land Tenure Insecurity: The Case of Liming in Finland

Sami Myyrä and Kyosti Pietola

No 24418, 94th Seminar, April 9-10, 2005, Ashford, UK from European Association of Agricultural Economists

Abstract: This article solves and characterizes optimal decision rules to invest in irreversible land improvements conditional on land tenure insecurity. Economic model is a normative dynamic programming model with known parameters for the one period returns and transition equations. The optimal decision rules for liming are solved numerically, conditional on alternative scenarios on the likelihood that the lease contract and, thus, farmer access to land is either renewed or expired. The model parameters represent Finnish soil quality and production conditions. The results suggest that irreversible liming decreases quickly and the yields decline gradually, when the farmer is confronted with land tenure insecurity caused by uncertain renewal of the lease contract. The results are confirmed via empirical results.

Keywords: Land; Economics/Use (search for similar items in EconPapers)
Pages: 12
Date: 2005
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae94:24418

DOI: 10.22004/ag.econ.24418

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