The aim of land consolidation projects is to improve the competitiveness of agriculture. Since land consolidation is subsidised by national and European means, the effectiveness of such measures must be determined. The following paper presents a method which makes it possible to calculate the direct economic effects of land consolidation. The calculations, considering labour demand, machinery costs and headland effects, compare the economic situation before and after land consolidation. The method was applied to four land consolidation projects in Bavaria. It can be shown that, to a varying degree, land consolidation in the studied areas leads to a substantial decrease in labour demand and machinery costs.