The Incidence of Agricultural Subsidies on Farmland Rental Rates: Overcoming Bias From Inertia, Expectations, and Tenancy Arrangements

Recent studies indicate that the effect of government subsidies on rental rates for farmland may be lower than once thought and lower than predictions from theory. However, there are still a number of unresolved issues in estimating subsidy incidence econometrically. We identify three such issues, inertia, expectations, and tenancy arrangements, and employ panel data from the state of Kansas to resolve them. Our econometric model suggests that subsidy incidence on rental rates is low in the short run, but consistent with predictions from theory in the long run.


Issue Date:
2010
Publication Type:
Conference Paper/ Presentation
Record Identifier:
http://ageconsearch.umn.edu/record/61469
PURL Identifier:
http://purl.umn.edu/61469
Total Pages:
20
JEL Codes:
Q1; H5
Series Statement:
Selected Paper
10472




 Record created 2017-04-01, last modified 2018-01-22

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