Di Corato, Luca and Brady, Mark
(2016).
Passive farming and land development: a real option approach�.
Uppsala:
(NL, NJ) > Dept. of Economics, Sveriges lantbruksuniversitet.
Working paper series / Swedish University of Agricultural Sciences, Department of Economics
; 2016:04
[Report]
|
PDF
340kB |
Abstract
We examine the impact that subsidies paid to passive farmers have on the lease of land and on the speed of land development. First, we find that, even if delaying land development, paying passive farmers increases the value of the land. Second, when bargaining for the lease of land, we show that the agreement between the parties is conditional on an underlying development project passing a threshold level in terms of profitability. Third, we identify the conditions leading to a Pareto improvement. Last, we illustrate our findings by considering the establishment of an energy crop on leased land.
| Authors/Creators: | Di Corato, Luca and Brady, Mark |
|---|---|
| Title: | Passive farming and land development: a real option approach� |
| Series/Journal: | Working paper series / Swedish University of Agricultural Sciences, Department of Economics (1401-4068) |
| Year of publishing : | 12 April 2016 |
| Depositing date: | 12 April 2016 |
| Number: | 2016:04 |
| Number of Pages: | 32 |
| Place of Publication: | Uppsala |
| Publisher: | Department of Economics, Swedish University of Agricultural Sciences |
| ISSN: | 1401-4068 |
| Language: | English |
| Publication Type: | Report |
| Full Text Status: | Public |
| Agris subject categories.: | X Agricola extesions > X70 Economics and management |
| Subjects: | (A) Swedish standard research categories 2011 > 5 Social Sciences > 502 Economics and Business > Economics |
| Agrovoc terms: | land use, contracts, prices, land development, extensive farming, subsidies |
| Keywords: | Real Options, Land development, Passive Farming, Nash Bargaining |
| URN:NBN: | urn:nbn:se:slu:epsilon-e-3382 |
| Permanent URL: | http://urn.kb.se/resolve?urn=urn:nbn:se:slu:epsilon-e-3382 |
| ID Code: | 13269 |
| Faculty: | NJ - Fakulteten för naturresurser och jordbruksvetenskap |
| Department: | (NL, NJ) > Dept. of Economics |
| External funders: | FORMAS |
| Deposited By: | DR LUCA DI CORATO |
| Deposited On: | 14 Apr 2016 14:24 |
| Metadata Last Modified: | 14 Apr 2016 14:24 |
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