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Abstract

An empirical bid-rent model is applied with a multinomial logit (MNL) for analyses of rice production in Japan, which is characterized by cultivation by producers working with various farm sizes. By combining plot and farm databases, the distances to respective field plots from potential holders in different farm size classes are examined using the model. The impact of land resource scarcity on farm size is explained by interpreting the distance effect. Results clarify that field plots at a greater distance from a farm command less rent. Especially in steeper areas with scarce land resources, large farms have no advantage in bid-rent competition with smaller farms.

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