An experimental analysis of German farmers' decisions to buy or rent farmland

Matthias Buchholz, Michael Danne and Oliver Musshoff

No 18 (2020), FORLand Working Papers from Humboldt University Berlin, DFG Research Unit 2569 FORLand "Agricultural Land Markets – Efficiency and Regulation"

Abstract: Farmland is an essential agricultural production factor that farmers can choose to either buy or rent. In this paper, we apply a discrete choice experiment to analyse German farmers' individual buying and rental decisions for farmland. Our results reveal that farmers have a higher willingness to buy than to rent farmland. Covariates such as farmers' risk attitude affect the decisions in the discrete choice experiment while no effect was observable for individual expectations about future farmland prices. Direct payments considerably raise farmers' willingness to buy and rent farmland. Farmers' decisions deviate substantially from normative predictions from the present value model.

Keywords: Agricultural Land Market; Farmland; Rent-or-Buy Decision; Discrete Choice Experiment; Present Value Model (search for similar items in EconPapers)
JEL-codes: C93 D90 Q10 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-agr, nep-dcm and nep-exp
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: An experimental analysis of German farmers’ decisions to buy or rent farmland (2022)
Working Paper: An experimental analysis of German farmers’ decisions to buy or rent farmland (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:forlwp:182020

DOI: 10.18452/21037

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