Capitalization of the Single Payment Scheme into Land Value: Generalized Propensity Score Evidence from the European Union

Michalek, Jerzy; Ciaian, Pavel; Kancs, d’Artis

doi:10.3368/le.90.2.260

Cited by 59 publications

(64 citation statements)

References 52 publications

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“…Empirically, these theoretical results are confirmed by Michalek, Ciaian, and Kancs (2014), whose empirical estimates suggest that the SPS capitalization rate decreases with variation in the SPS value: the hybrid model has a higher capitalization rate than the historical model. This is also consistent with findings of Johansson and Nilsson (2012) for Sweden, and Kilian et al (2012) for Bavaria.…”

Section: Implications Of the Theoretical Analysis On Capitalization Osupporting

confidence: 71%

“…In both Sweden and Germany the entitlement/UAA ratio is (almost) one (see Table 2), which, according to our theoretical results, is expected to cause a higher capitalization of the SPS. In contrast, Michalek, Ciaian, and Kancs (2014) find that the capitalization rate is lower in those regions, where the entitlement/UAA ratio is lower. Similarly, Guastella et al (2013) find a statistically insignificant impact of the SPS on land rents in Italy, which has deficit entitlements.…”

Section: Implications Of the Theoretical Analysis On Capitalization Ocontrasting

confidence: 43%

“…This is because the negative effect on land values due to the CAP budget cut (Ref. Michalek, Ciaian, and Kancs (2014) confirm that the SPS capitalization reduces with the variation in the SPS value; the capitalization rate is considerably higher for low levels of the SPS than for high levels, that is, low SPS levels determine the level of capitalization (at the margin). The capitalization rate varies between 11% and 94% for the SPS smaller than 200 E/ha in the EU-15.…”

Section: Implications Of the Theoretical Analysis On Capitalization Omentioning

confidence: 97%

See 2 more Smart Citations

The Impact of the 2013 Reform of the Common Agricultural Policy on Land Capitalization in the European Union

Ciaian

Kancs

Swinnen

2014

Applied Eco Perspectives Pol

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Decoupled direct payments to farmers were introduced in the European Union (EU) in the form of the Single Payment Scheme (SPS) in 2005. The 2013 Common Agriculture Policy (CAP) reform changed both the implementation of the SPS and its budget. We assess the possible effects of the 2013 CAP reform on EU land markets, particularly the capitalization of the SPS in land rental values. Our analyses suggest that the implementation details of the 2013 CAP reform will largely determine the impact of the SPS on land markets. The key considerations are the reference period for entitlement allocation, regionalization, payment differentiation, and budgetary changes. Our analysis also implies that a number of relatively minor policy changes could have substantial impacts on land markets.

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Section: Implications Of the Theoretical Analysis On Capitalization Osupporting

confidence: 71%

Section: Implications Of the Theoretical Analysis On Capitalization Ocontrasting

confidence: 43%

Section: Implications Of the Theoretical Analysis On Capitalization Omentioning

confidence: 97%

See 1 more Smart Citation

The Impact of the 2013 Reform of the Common Agricultural Policy on Land Capitalization in the European Union

Ciaian

Kancs

Swinnen

2014

Applied Eco Perspectives Pol

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“…This is particularly the case with CDP and RDP, because they affect both output and input prices and thus generate leakage of policy rents to input suppliers and consumers. In particular, landowners might potentially be large beneficiaries of CDP and RDP due to relatively inelastic land supply (Goodwin et al, 2003;Lence and Mishra, 2003;Kilian and Salhofer, 2008;Kirwan, 2009;Breustedt and Habermann, 2011;Michalek et al, 2014;Ciaian and Kancs, 2012;Patton et al, 2008). The SPS are less prone to the leakage issue, because they are decoupled from production and only partially coupled to input (land) use.…”

Section: Discussionmentioning

confidence: 99%

Income Distributional Effects of CAP Subsidies

Ciaian¹,

Kancs²,

Paloma³

2015

Outlook Agric

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“…() for all EU Member States and Michalek et al . () for all EU‐15 Member States. While Kilian et al .…”

Section: Introductionmentioning

confidence: 97%

Capitalisation of the SPS into Agricultural Land Rental Prices under Harmonisation of Payments

Klaiber¹,

Salhofer²,

Thompson³

2017

J Agricultural Economics

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As the 2013 Reform of the Common Agricultural Policy (CAP) calls for the harmonisation of Single Payment Scheme (SPS) payments, we estimate the implications of this mandate on agricultural land rental rates over time as Germany began harmonising payments in 2010. Using Bavarian farm‐level panel data we find strong capitalisation effects that increase substantially in the years following 2009. On average, the marginal effect on rental rates of an additional SPS euro is 37 cents, growing over time to 53 cents as harmonisation develops.

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Capitalization of the Single Payment Scheme into Land Value: Generalized Propensity Score Evidence from the European Union

Cited by 59 publications

References 52 publications

The Impact of the 2013 Reform of the Common Agricultural Policy on Land Capitalization in the European Union

The Impact of the 2013 Reform of the Common Agricultural Policy on Land Capitalization in the European Union

Income Distributional Effects of CAP Subsidies

Capitalisation of the SPS into Agricultural Land Rental Prices under Harmonisation of Payments

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