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Institutions in rural land transactions Evidence from The Netherlands

Institutions in rural land transactions Evidence from The Netherlands Purpose – This article aims at analysing the different institutional aspects of the rural land market that are manifest at the transactional level. Second, it answers the question whether including these aspects in a land price model increases the understanding of rural land market outcomes. Institutional economics scholars have challenged the limited institutional behaviour of conventional land market models. Despite their research methods remaining primarily qualitative, research findings suggest that we should look at institutional aspects to understand land and real estate market outcomes better. Design/methodology/approach – This paper presents a hedonic price model explaining rural land prices by using individual institutional transaction aspects from the deeds of purchase of the land exchange. Findings – The results indicate that incorporating institutional aspects, such as property rights, transactional arrangements and governance context, as explanatory variables significantly improves the power of the model. Originality/value – The approach taken in this article is new in the sense that it tries to combine a quantitative research method with a rich data set of a more qualitative character. The use of deeds of purchase as a primary source of a hedonic price model is relatively new and provides a first step in bridging the gap between advanced hedonic land price models and rich institutional economic insights in market processes. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of European Real Estate Research Emerald Publishing

Institutions in rural land transactions Evidence from The Netherlands

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Publisher
Emerald Publishing
Copyright
Copyright © 2014 Emerald Group Publishing Limited. All rights reserved.
ISSN
1753-9269
DOI
10.1108/JERER-01-2014-0005
Publisher site
See Article on Publisher Site

Abstract

Purpose – This article aims at analysing the different institutional aspects of the rural land market that are manifest at the transactional level. Second, it answers the question whether including these aspects in a land price model increases the understanding of rural land market outcomes. Institutional economics scholars have challenged the limited institutional behaviour of conventional land market models. Despite their research methods remaining primarily qualitative, research findings suggest that we should look at institutional aspects to understand land and real estate market outcomes better. Design/methodology/approach – This paper presents a hedonic price model explaining rural land prices by using individual institutional transaction aspects from the deeds of purchase of the land exchange. Findings – The results indicate that incorporating institutional aspects, such as property rights, transactional arrangements and governance context, as explanatory variables significantly improves the power of the model. Originality/value – The approach taken in this article is new in the sense that it tries to combine a quantitative research method with a rich data set of a more qualitative character. The use of deeds of purchase as a primary source of a hedonic price model is relatively new and provides a first step in bridging the gap between advanced hedonic land price models and rich institutional economic insights in market processes.

Journal

Journal of European Real Estate Research – Emerald Publishing

Published: Jul 29, 2014

Keywords: Institutions; Hedonic price models; Land market; Land price; Land transactions

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