RT Journal Article
SR Electronic
T1 Capitalization of the Single Payment Scheme into Land Value: Generalized Propensity Score Evidence from the European Union
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 260
OP 289
DO 10.3368/le.90.2.260
VO 90
IS 2
A1 Michalek, Jerzy
A1 Ciaian, Pavel
A1 Kancs, d’Artis
YR 2014
UL http://le.uwpress.org/content/90/2/260.abstract
AB This paper estimates the capitalization of the single payment scheme (SPS) into land values. The theory suggests a nonlinear and discontinuous relationship between the SPS and land rents. In empirical analysis we employ unique farm-level panel data and apply the generalized propensity score matching approach. Our estimates suggest a 6% to 10% SPS capitalization rate. On average in the European Union, the nonfarming landowners’ gains from the SPS are only 4%. However, there is a large variation in the capitalization rate for different SPS levels and between different member states (3% to 94%). (JEL H23, Q15)