An experimental analysis of German farmers' decisions to buy or rent farmland. (September 2022)

• Record Type: Journal Article
• Authors: Buchholz, Matthias; Danne, Michael; Musshoff, Oliver
• Is Part Of: Land use policy. Volume 120(2022)
• Publication Date: 2022-09
• Subjects: C93 -- D90 -- Q10; Agricultural land market -- Farmland -- Rent-or-buy decision -- Discrete choice experiment -- Present value model; Land use -- Periodicals; Land use -- Government policy -- Periodicals; Sol, Utilisation du -- Périodiques; Sol, Utilisation du -- Politique gouvernementale -- Périodiques; Electronic journals; 333.7305
• DOI: 10.1016/j.landusepol.2022.106218
• Languages: English
• ISSNs: 0264-8377

Abstract

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.