Simulating agricultural land rental markets by combining agent-based models with traditional economics concepts: The case of the Argentine Pampas. (September 2015)

• Record Type: Journal Article
• Authors: Bert, Federico; North, Michael; Rovere, Santiago; Tatara, Eric; Macal, Charles; Podestá, Guillermo
• Is Part Of: Environmental modelling & software. Volume 71(2015:Sep.)
• Page Start: 97
• Page End: 110
• Publication Date: 2015-09
• Subjects: Agricultural land markets -- Agricultural production -- Land tenure -- Argentina -- Agent-based modeling; AACREA Asociación Argentina de Consorcios Regionales de Experimentación Agrícola -- ABM Agent-Based Modeling -- ACE Agent-based Computational Economics -- AL Aspiration Level -- AM Activity-Management -- CAU Cropped Area Update -- CE Certainty Equivalent -- DPR Desired Profitability Rate -- DSSAT Decision Support System for Agrotechnology Transfer -- EU Expected Utility -- GM Gross Margin -- LARMA LAnd Rental MArket model -- LRP Land Rental Price -- MCP Market Clearing Price -- MPR Minimum Progress Rate -- PM Pampas Model -- PR Progress Rate -- WC Working Capital -- WTA Willingness To Accept -- WTP Willingness To Pay; Environmental monitoring -- Computer programs -- Periodicals; Ecology -- Computer simulation -- Periodicals; Digital computer simulation -- Periodicals; Computer software -- Periodicals; Environmental Monitoring -- Periodicals; Computer Simulation -- Periodicals; Environnement -- Surveillance -- Logiciels -- Périodiques; Écologie -- Simulation, Méthodes de -- Périodiques; Simulation par ordinateur -- Périodiques; Logiciels -- Périodiques; Computer software; Digital computer simulation; Ecology -- Computer simulation; Environmental monitoring -- Computer programs; Periodicals; Electronic journals; 363.70015118
• DOI: 10.1016/j.envsoft.2015.05.005
• Languages: English
• ISSNs: 1364-8152

Abstract

Abstract: Land exchange through rental transactions is a central process in agricultural systems. The land tenure regimes emerge from land transactions and structural and land use changes are tied to the dynamics of the land market. We introduce LARMA, a LAnd Rental MArket model embedded within the Pampas Model (PM), an agent-based model of Argentinean agricultural systems. LARMA produces endogenous formation of land rental prices. LARMA relies on traditional economic concepts for LRP formation but addresses some drawbacks of this approach by being integrated into an agent-based model that considers heterogeneous agents interacting with one another. PM-LARMA successfully reproduced the agricultural land tenure regimes and land rental prices observed in the Pampas. Including adaptive, heterogeneous and interacting agents was critical to this success. We conclude that agent-based and traditional economic models can be successfully combined to capture complex emergent land tenure and market price patterns while simplifying the overall model design. Highlights: LARMA is a land rental market model with endogenous rental price formation. LARMA is embedded into the Pampas agent-based model (PM). LARMA combines traditional economics concepts with agent-based modeling. PM-LARMA successfully reproduces land tenure patterns and rental price dynamics. We discuss the advantages of combining approaches for modeling land rental markets.