Do non-farmers pay more for land than farmers?

Abstract

The increase in farmland prices in many parts of the world over the past decade has sparked discussions about whether non-farmers pay higher prices for farmland. This study uses a causal machine learning approach with a rich data set of land transactions in Germany to quantify the potential price premium paid by non-farmers. By applying the causal forest method, we uncover the heterogeneity of price premiums and reveal moderating effects of covariates. We find that the average positive price premium by non-farmers decreases with parcel size and distance to a highway exit.