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Article

Can Agricultural Disaster Relief Programs Affect Farmland Prices? Empirical Evidence from Farmland Transaction Data

1
School of Economics and Management, Hubei Polytechnic University, No. 16 North Road, Guilin 435003, China
2
Department of Agricultural Economics, National Taiwan University, No. 1 Roosevelt Road, Section 4, Taipei 10617, Taiwan
3
Graduate School of Engineering Science and Technology, National Yunlin University of Science and Technology, 123 University Road, Section 3, Douliou 64002, Taiwan
*
Author to whom correspondence should be addressed.
Academic Editors: Qiujie Shi, Raymond Yu Wang, Guangzhong Cao and Tao Liu
Land 2021, 10(7), 728; https://doi.org/10.3390/land10070728
Received: 14 June 2021 / Revised: 3 July 2021 / Accepted: 9 July 2021 / Published: 10 July 2021
(This article belongs to the Special Issue Sustainable Rural Transformation under Rapid Urbanization)
The literature on the capitalization of agricultural policies documents that government subsidies can increase farmland values with attesting empirical evidence found in a variety of agricultural programs. This study argues that the well-documented capitalization effect of agricultural subsidies on farmland prices may not be directly related to the agricultural disaster relief program (ADRP). On the one hand, disaster relief payments can positively capitalize into farmland prices. On the other hand, disaster shocks may result in farm income loss which can decrease farmland prices. This paper empirically examines the overall effect of the ADRP on farmland prices in Taiwan. A unique dataset on 97,864 parcels of farmland transacted in the farmland market is used. By estimating the fixed effect and instrumental variable fixed effect model, a negative overall effect of the incidence and the level of ADRP payments on farmland prices is evident. Moreover, the effect is more pronounced among farmland located in urban areas. This finding provides evidence that the negative stigmatized effect dominates the positive capitalization effect of the ADRP payments on farmland values, especially for farmland located in urban areas (JEL Q15, Q18, Q54). View Full-Text
Keywords: farmland prices; farmland transaction; agricultural disaster relief program (ADRP); capitalization effect farmland prices; farmland transaction; agricultural disaster relief program (ADRP); capitalization effect
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MDPI and ACS Style

Lee, T.-H.; Chang, H.-H.; Hsieh, Y.-T.; Chang, B.-Y. Can Agricultural Disaster Relief Programs Affect Farmland Prices? Empirical Evidence from Farmland Transaction Data. Land 2021, 10, 728. https://doi.org/10.3390/land10070728

AMA Style

Lee T-H, Chang H-H, Hsieh Y-T, Chang B-Y. Can Agricultural Disaster Relief Programs Affect Farmland Prices? Empirical Evidence from Farmland Transaction Data. Land. 2021; 10(7):728. https://doi.org/10.3390/land10070728

Chicago/Turabian Style

Lee, Tzong-Haw, Hung-Hao Chang, Yi-Ting Hsieh, and Bo-Yuan Chang. 2021. "Can Agricultural Disaster Relief Programs Affect Farmland Prices? Empirical Evidence from Farmland Transaction Data" Land 10, no. 7: 728. https://doi.org/10.3390/land10070728

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