Interest towards farmland market has been increasing in recent years. In developing countries there is a rising concern about land being purchased by foreign investors, while in the developed world the debate is focused on whether agricultural factors are still the main determinants of land values or not. This work assesses the determinants of land values in Italy using TSCS data techniques during the time span 1992-2013. In Italy farmland values have historically been influenced more by natural characteristics of the land than agricultural prices. However, lately non-agricultural factors have been increasing their importance. We find that the main determinants of Italian farmland prices are population density, GDP per capita, land productivity, agricultural prices and farm subsidies. In the case of vineyards, changing rainfall patterns due to climate change have also a significant impact. Environmental regulations for livestock farms positively affects arable land values.


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