The Valuation of Agricultural Land and the Influence of Government Payments. Factor Markets Working Paper No. 10, December 2011

This study gives an overview of the theoretical foundations, empirical procedures and derived results of the literature identifying determinants of land prices. Special attention is given to the effects of different government support policies on land prices. Since almost all empirical studies on the determination of land prices refer either to the net present value method or the hedonic pricing approach as a theoretical basis, a short review of these models is provided. While the two approaches have different theoretical bases, their empirical implementation converges. Empirical studies use a broad range of variables to explain land values and we systematise those into six categories. In order to investigate the influence of different measures of government support on land prices, a meta-regression analysis is carried out. Our results reveal a significantly higher rate of capitalisation for decoupled direct payments and a significantly lower rate of capitalisation for agri-environmental payments, as compared to the rest of government support. Furthermore, the results show that taking theoretically consistent land rents (returns to land) and including non-agricultural variables like urban pressure in the regression implies lower elasticities of capitalisation. In addition, we find a significant influence of the land type, the data type and estimation techniques on the capitalisation rate.

Key Issues in Agricultural Labour Markets: A Review of Major Studies and Project Reports on Agriculture and Rural Labour Markets. Factor Markets Working Paper No. 20, February 2012

This paper provides a synthesis of the empirical literature on the key issues in agricultural and rural labour markets since 1960s, drawing mainly upon studies from the United States and the European Union, but also including relevant material from developing countries. The contribution of this meta-analysis lies in its unique structure as it covers the main research questions which have been addressed in the literature and includes the most cited papers from the American Journal of Agricultural Economics, Journal of Agricultural Economics, European Review of Agricultural Economics, Agricultural Economics as well as other reports and EU funded projects. Each research question is accompanied by tabular summaries which classify the individual studies according to the methodology and the variables employed. The heterogeneous conditions across countries, the different research questions and methodologies, and the type of data employed, have sometimes led to conflicting results. Nonetheless, by comparing the results it is possible to assess the significance and the direction of the determinants of rural labour allocation and its adjustments, and thus contribute to a better understanding on the functioning of rural labour markets. Lastly, by recognising the importance of the institutional framework, the paper provides useful policy insights.

The Reallocation of Agricultural Labour across Sectors: An Empirical Strategy for Micro Data. Factor Markets Working Document No. 45, May 2013

This paper presents an empirical methodology for studying the reallocation of agricultural labour across sectors from micro data. Whereas different approaches have been employed in the literature to better understand the mobility of labour, looking at the determinants to exit farm employment and enter off-farm activities, the initial decision of individuals to work in agriculture, as opposed to other sectors, has often been neglected. The proposed methodology controls for the selectivity bias, which may arise in the presence of a non-random sample of the population, in this context those in agricultural employment, which would lead to biased and inconsistent estimates. A 3-step multivariate probit with two selection and one outcome equations constitutes the selected empirical approach to explore the determinants of farm labour to exit agriculture and switch occupational sector. The model can be used to take into account the different market and production structures across European member states on the allocation of agricultural labour and its adjustments.

Agricultural Labour Market Flexibility in the EU and Candidate Countries. Factor Markets Working Document No. 49, June 2013

Factor markets that function well are a crucial condition for the competitiveness and growth of agriculture. Institutions and regulation may give rise to agricultural labour market heterogeneity, which could have important effects on the functioning of the labour market and other agricultural factor markets in EU member states. This paper first defines the institutional framework for the labour market, and then presents a brief literature review of previous studies of labour market institutional frameworks. Based on the literature, a survey to characterise agricultural labour markets was undertaken, which was implemented for a selection of EU27 and EU candidate countries, with responses based on expert opinion. The survey data were then used to construct indices of labour market flexibility/rigidity for the countries examined. These indices were used to make inter-country labour market comparisons and to draw inferences about the institutions and functioning of the agricultural labour market.