scholarly journals Subsidy Incidence in Factor Markets: An Experimental Approach

2013 ◽  
Vol 45 (1) ◽  
pp. 17-33 ◽  
Author(s):  
Amy M. Nagler ◽  
Dale J. Menkhaus ◽  
Christopher T. Bastian ◽  
Mariah D. Ehmke ◽  
Kalyn T. Coatney
Keyword(s):  
Experimental Approach ◽  
Agricultural Land ◽  
Market Competition ◽  
University Student ◽  
Empirical Estimates ◽  
Land Rental ◽  
Subsidy Incidence ◽  
Factor Markets ◽  
Rental Markets ◽  
Market Experiments

Laboratory market experiments are used to estimate the incidence of a stylized subsidy in factor market negotiations with university student and agricultural professional subjects. In separate sessions with both groups, prices converged approximately four and a half tokens higher when a 20-token per-unit subsidy was paid to buyers; this equates to 44% of the predicted 10-token split. A proportional market incentive treatment clarifies this subsidy effect. Discrepancies between predicted and observed incidence are similar to previous empirical estimates of subsidy incidence in agricultural land rental markets. A behavioral anomaly as well as buyer-buyer market competition may contribute to experimental results.

scholarly journals Stacking Subsidies in Factor Markets: Evidence from Market Experiments

2021 ◽  
Vol 14 (12) ◽  
pp. 608
Author(s):  
Anthony Baffoe-Bonnie ◽  
Christopher T. Bastian ◽  
Dale J. Menkhaus ◽  
Owen R. Phillips
Keyword(s):  
Framing Effects ◽  
Competitive Market ◽  
Government Policies ◽  
Support Programs ◽  
Multiple Agents ◽  
Societal Welfare ◽  
Subsidy Incidence ◽  
Factor Markets ◽  
Market Experiments ◽  
Laboratory Market

Government policies employ different support programs such as subsidies to reduce risks, increase efficiency in markets, and enhance societal welfare. In markets such as ethanol markets, where multiple agents receive subsidy, it is often difficult to determine whether recipients of these support programs will transfer some of their payments to other agents in the market. In this study, we use laboratory market experiments to understand subsidy incidence in markets where both buyers and sellers receive subsidies, and there are few buyers relative to sellers. Our results show that when subsidizing both sides of the market, framing effects matter, and when markets are buyer concentrated, subsidy distributions generally tend to favor buyers. With a per-unit subsidy of 20 tokens to both sides and an equal number of buyers and sellers in the market, we find that buyers increase their earnings by 13.4% while seller earnings decrease by 16.1%. On a per-schedule basis, buyer earnings in the concentrated market are similar to what we observed in the competitive market.

scholarly journals Agricultural Resources and Trade Strategies: Response to Falling Land-to-Labor Ratios in Malawi

Land ◽  
2020 ◽  
Vol 9 (12) ◽  
pp. 512
Author(s):  
Sarah Ephrida Tione
Keyword(s):  
Labor Markets ◽  
Agricultural Land ◽  
Systems Approach ◽  
Unobserved Heterogeneity ◽  
Farm Household ◽  
Agricultural Labor ◽  
Land Rental ◽  
Factor Markets ◽  
Nationally Representative ◽  
Labor Market Decisions

This study assesses how growing land scarcity relative to family labor is influencing farm household decisions to trade in agricultural land and labor markets to improve their livelihood. Using the farm household model, I analyze decisions to rent-in land or hire out labor among smallholders in Malawi. I use data from two rounds of a nationally representative balanced-household panel and apply a systems approach to jointly estimate land rental and labor market decisions while controlling for simultaneity and unobserved heterogeneity. The results indicate that the falling owned-land-to-labor-endowment ratio can push households to participate in either land rental or seasonal agricultural labor markets. However, the probability of hiring out labor for casual work and short-term gains decreases when potential tenant households rent-in land. Based on asset-wealth-to-labor-endowment ratios, wealthier households are more likely to rent-in land while poorer households, including most smallholder households, are more likely to hire out labor. These results suggest higher friction in the land rental market compared to the agricultural labor markets and liquidity constraints dictating what is necessary to support agricultural operations and household needs. Accordingly, agricultural policy in Malawi should aim to reduce friction in factor markets.

scholarly journals German Farmers’ Perspectives on Price Drivers in Agricultural Land Rental Markets—A Combination of a Systematic Literature Review and Survey Results

Land ◽  
2021 ◽  
Vol 10 (2) ◽  
pp. 180
Author(s):  
Cord-Friedrich von Hobe ◽  
Marius Michels ◽  
Oliver Musshoff
Keyword(s):  
Literature Review ◽  
Systematic Literature Review ◽  
Agricultural Land ◽  
Scientific Evidence ◽  
Market Prices ◽  
Policy Interventions ◽  
Land Rental ◽  
The Status ◽  
Rental Markets ◽  
Land Rental Markets

Despite the popularity of agricultural land markets as a research topic, a current literature review on price drivers on agricultural land rental markets is missing, which is crucial in order to gain an overview of the status quo. Furthermore, farmers’ perceptions of price drivers on agricultural land rental markets have not been considered sufficiently. Therefore, this study combines descriptive results from a survey with 156 German farmers conducted during 2019–2020 using purposive sampling and a systematic literature review. The systematic literature review reveals four important areas acting as price drivers in agricultural land rental markets: policy/Common Agricultural Policy (CAP), bioenergy, climate change, and market prices/competition. Based on the overview, several points of departure for further research are provided. Furthermore, results from the survey show that farmers’ perceptions of the relative importance of the price drivers differ from the results of scientific literature. Therefore, perceptions of farmers should be considered for possible policy interventions derived from scientific evidence.

scholarly journals Do Agricultural Machinery Services Facilitate Land Transfer? Evidence from Rice Farmers in Sichuan Province, China

Land ◽  
2021 ◽  
Vol 10 (5) ◽  
pp. 466
Author(s):  
Xi Yu ◽  
Xiyang Yin ◽  
Yuying Liu ◽  
Dongmei Li
Keyword(s):  
Negative Impact ◽  
Sichuan Province ◽  
Impact Factors ◽  
Farm Labor ◽  
Agricultural Machinery ◽  
Rice Farmers ◽  
Land Transfer ◽  
Land Rental ◽  
Rental Markets ◽  
The Impact

Agricultural machinery services play an increasingly important role in the land transfer market, especially in developing countries. Prior studies have explored the impact factors of machinery use on agricultural production and land transfer, respectively. However, little research has focused on the relationship between the adoption of agricultural machinery services and the land transfer of rice farmers. To bridge this gap, this study investigated the correlation between machinery services and land transfer, using unique survey data of 810 rice farmers collected from Sichuan province in China. Additionally, this study further explored the impact mechanism on land transfer of rural households with IV-Probit and IV-Tobit models. The empirical results show the following: (i) Agricultural machinery services have a significantly positive and robust effect on both the incidence and area of rice farmers’ land transfer-in, while the impact degree is different. Specifically, with other conditions remaining unchanged, and with a 1% increase in the proportion of machinery services, the average probability of land transfer-in of rice farmers increased by 2.4%, and the area of land transfer-in increased by 13.4 mu, on average. (ii) For control variables, head education, agricultural certificates and whether the majority of land, are in a flat area have positive impacts on land transfer-in behavior. Yet, age and off-farm labor have a negative impact on land transfer-in area. Moreover, our findings highlight the importance of agricultural machinery services in stimulating the development of rural land rental markets.

Village Fairness Norms and Land Rental Markets

2021 ◽  
Author(s):  
Kwabena Krah ◽  
Annemie Maertens ◽  
Wezi Mhango ◽  
H.C. Michelson ◽  
Vesall Nourani
Keyword(s):  
Land Rental ◽  
Fairness Norms ◽  
Rental Markets ◽  
Land Rental Markets

Access to Land via Land Rental Markets

2001 ◽  
pp. 196-229 ◽  
Author(s):  
Elisabetii Sadoulet ◽  
Rinku Murgai ◽  
Alian De Janvry
Keyword(s):  
Land Rental ◽  
Rental Markets ◽  
Land Rental Markets

scholarly journals The Factors Affecting Farmland Rental Prices in Slovakia

Land ◽  
2020 ◽  
Vol 9 (3) ◽  
pp. 96
Author(s):  
Ivan Takáč ◽  
Jarmila Lazíková ◽  
Ľubica Rumanovská ◽  
Anna Bandlerová ◽  
Zuzana Lazíková
Keyword(s):  
Agricultural Land ◽  
Economic Value ◽  
Production Costs ◽  
The European Union ◽  
Total Revenue ◽  
Factors Affecting ◽  
Positive Effects ◽  
Land Rental ◽  
Land Valuation ◽  
The Impact

Agricultural land is a limited natural resource with increasing economic value. This study analyses land rental relationships in Slovakia, including legal rental regulations, and identifies the impact of certain factors, such as the European Union Common Agricultural Policy (CAP) payments, and geographical and economic factors on land rental prices. From the results of econometric models, it was found that certain CAP payments have an effect on rental prices, mainly the single area payment scheme (SAPS), payments for agri-environmental-climate schemes (AECS), and animal welfare, which were found to have positive effects. Other important factors found to influence rental prices are economic indicators (such as total revenue share of total costs, share of revenue from agricultural production in terms of total revenue, share of production costs as a percentage of total costs, wages, and number of employees) and geographical factors (such as region or partial production areas). However, the distance of the farm from the district city (LAU 1) and the share of farmland affected by natural constraints do not considerably affect rental prices in Slovakia. Land consolidation is a statistically significant factor according to the models; however, its impact is almost zero. Knowledge of these factors constitutes important know-how, not only for policy makers but also for the actors operating in the land rental market (e.g., landlords, tenants, experts on land valuation, and real estate agents).

Agroholdings and land rental markets: a spatial competition perspective

2020 ◽  
Author(s):  
Marten Graubner ◽  
Igor Ostapchuk ◽  
Taras Gagalyuk
Keyword(s):  
Market Power ◽  
Spatial Competition ◽  
Empirical Support ◽  
Land Markets ◽  
Eastern European ◽  
Ceteris Paribus ◽  
Equilibrium Prices ◽  
Land Rental ◽  
Rental Markets ◽  
Eastern European Countries

Abstract With the emergence of large, horizontally integrated farm enterprises especially in Eastern European countries, the question arises whether these agroholdings exercise market power in (local) land markets. Using a theoretical framework of spatial competition that accounts for the presence of multi-farm agroholdings, we derive equilibrium prices under alternative spatial competition settings. Based on the investigation of Ukrainian farms, we provide theoretical explanations and empirical support for farms affiliated with an agroholding possessing (ceteris paribus) more land and setting higher land rental prices compared to independent farms. The results indicate that agroholdings may act as price leaders in local land markets.

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