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Price dispersion in farmland markets: What is the role of asymmetric information?

Christoph Kahle, Stefan Seifert and Silke Hüttel ()

No 11 (2019), FORLand Working Papers from Humboldt University Berlin, DFG Research Unit 2569 FORLand "Agricultural Land Markets – Efficiency and Regulation"

Abstract: This article investigates the role played by informational cost in agricultural land markets to explain price dispersion. Based on a hedonic model under incomplete information, we build a two-tier stochastic frontier. By linking costs of being information deficient to agent characteristics such as degree of professionalism, we identify relative price effects of buyers and sellers related to search. We compile a comprehensive data set of more than 10,000 transactions in Saxony-Anhalt, Germany, between 2014 and 2017. We find institutional sellers to achieve the lowest losses resulting from information deficiency while tenant buyers can benefit from informational advantages. We conclude that Germany's policy-makers can do more to support market transparency.

Keywords: farmland markets; hedonic pricing; information deficiency; two-tier frontier (search for similar items in EconPapers)
JEL-codes: D82 D83 Q15 Q24 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-agr
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https://www.econstor.eu/bitstream/10419/213065/1/FORLand-2019-11.pdf (application/pdf)

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Journal Article: Price Dispersion in Farmland Markets: What Is the Role of Asymmetric Information? (2021) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:forlwp:112019

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