The Capitalization of Agricultural Subsidies into Land Prices

• DOI: 10.1146/annurev-resource-102020-100625
• Publication Date: 2021-06-08T22:07:14Z
• Authors: Pavel Ciaian; Edoardo Baldoni; d'Artis Kancs; Dušan Drabik
• Keywords: Capitalization; Agricultural land

We review the recent theoretical and empirical literature on capitalization of agricultural subsidies into land prices. The predicts that are capitalized prices when supply is inelastic markets function well. share significantly depends implementation farm subsidies, local land-market institutions, rural market imperfections, spatial effects. Most studies have shown only partially prices, estimating decoupled payments land-based exhibit higher than coupled nonland-based respectively. However, estimated rates vary widely across largely because data availability identification challenges.