Tabelle 8: Expected Effects on Land Prices |
| Changes
in: (other things constant) |
Expected
Effect on Land Price |
Main
reason |
| Increases in output prices |
+ |
Increases the value of the
marginal product of land (VMP) |
| Increases in input prices |
? (-) |
Depends on the effect on
output prices |
| Increases in the
output/input price ratio |
+ |
Increases the VMP of land |
| Technological change |
+ |
Increases production per
unit of land (VMP increases) |
| Soil conservation programs |
? (+) |
Depends on the
capitalization of the soil conservation, that could be a function of the initial degree of
soil problems |
| Increase of subsidies for
agricultural production |
+ |
Assuming subsidies have real
impact on production costs, they increase the VMP |
| Increase in transaction
costs in the output or input market |
- |
Decreases the real net rent
received by the tenant/landowner |
| Increase in landowners fix
costs(depreciation, maintenance costs) |
- |
Reduces the net rent that
could be obtained from land. Also induces renting instead of buying. |
| Increase in searching,
bargaining and transfer costs in the land market |
- |
Reduces the net rents that
could be obtained from land. Also induces renting instead of buying. |
| Property taxes |
? (-) |
Increase in owners costs but
the effect depends on the relation between taxes and inflation, and on the type of taxes. |
| Income taxes |
? (-) |
Reduces the net land rents,
but it depends on the relation with inflation. |
| Inflation |
+ |
1)
Speculative, increases attractiveness of land as asset 2) depending on the effect on real
output prices, affects demand (VMP) |
| Increases in real interest
rate |
- |
Changes the opportunity cost
of investments, makes more attractive other sectors. |
| Increase in expected future
capital gains |
+ |
1) With
perfect information the expected gains tend to be real gains then price bubbles could be
observed. 2) With less information, more speculative movements and price overreaction. |
| Reducing fixed zonifications
(agricultural land/urban) |
? (+) |
Breaking up fixed
zonifications tends to open the market. Final effect will depend on what alternative uses
for land come to be relevant. |
| Credit programs to buy land |
+ |
More demand for a fixed or
quasi fixed asset supply |
| Population growth |
+ |
More demand for agricultural
output (more demand) and more demand for space. |
| Government programs |
? (+) |
Depends on the program, but
usually the possibility of capitalizing government benefits increases the capital gains
(subsidies, etc.) |
(C.
Trivelli, 1997:7f, http://www.fao.org/waicent/faoinfo/sustdev/Ltdirect/Ltan0016.htm
) |
