We review the recent theoretical and empirical literature on the capitalization of agricultural subsidies into land prices. The theoretical literature predicts that agricultural subsidies are capitalized into land prices when land supply is inelastic and land markets function well. The share of capitalized subsidies significantly depends on the implementation of farm subsidies, local land-market institutions, rural market imperfections, and spatial effects. Most empirical studies have shown that agricultural subsidies are only partially capitalized into land prices, estimating that decoupled payments and land-based subsidies exhibit higher capitalization than coupled payments and nonland-based subsidies, respectively. However, estimated capitalization rates vary widely across studies largely because of data availability and identification challenges.
CIAIAN Pavel;
BALDONI Edoardo;
DRABIK Dusan;
KANCS D'Artis;
2021-06-25
ANNUAL REVIEWS
JRC123815
1941-1340 (online),
https://www.annualreviews.org/doi/abs/10.1146/annurev-resource-102020-100625,
https://publications.jrc.ec.europa.eu/repository/handle/JRC123815,
10.1146/annurev-resource-102020-100625 (online),
| Name | Country | City | Type |
|---|
This document is only visible at the Commission level.
You are not authorized to publish or distribute it outside the European Commission.
This is a public document. You can share this publication.
Datasets
| ID | Title | Public URL |
|---|
Dataset collections
| ID | Acronym | Title | Public URL |
|---|
Scripts / source codes
| Description | Public URL |
|---|
Additional supporting files
| File name | Description | File type |
|---|