Direct and spillover effects of short- and long-term land pricing drivers: Evidence from Italian districts, 1992−2019

Abstract

The global economic and food crisis has increased the demand for land and rekindled the interest in farmland market investments worldwide. This study explores the Italian farmland market, investigating its main influencing factors from 1992 to 2019 using a spatial econometric framework. Traditional land characteristics and location-specific agricultural factors, as well as non-agricultural factors, are assessed. The average level of farmland prices and their growth are analyzed by modeling the potential types of spatial interactions, and the results are corroborated by considering different configurations of spatial weight matrices. The results show that farmland markets are influenced by land's current net returns as well as by its potential alternative uses. Therefore, factors considered external to the agricultural dimension, such as population pressure, climate change, and speculative expectations, increasingly shape farmland prices.