Effects of Socio-Institutional and Emotional Factors on Japanese Farmland Rental Transactions

• Published in: Journal of agricultural and applied economics Vol. 38; no. 1; pp. 33 - 46
• Main Author: Kunimitsu, Yoji
• Format: Journal Article
• Language: English
• Published: New York, USA Cambridge University Press 01.04.2006
• Subjects: agricultural economics; Agricultural land; agricultural subsidies; C25; contingent valuation questionnaire; D44; econometric models; economic analysis; economic inefficiency; farmers' attitudes; land productivity; leasing; paddy soils; Q12; Q15; Q38; R58; regional heteroscedasticity; rental agreement level; rental rate; rice; stochastic choice model; Japan; stochastic choice model; Q12; regional heteroscedasticity; Q15; R58; D44; contingent valuation questionnaire; C25; Q38; economic inefficiency; rental agreement level; rental rate
• ISSN: 1074-0708; 2056-7405; 1074-0708
• DOI: 10.1017/S1074070800022057

Farmland reallocation between farmers through rental transactions is critical for improving Japanese rice productivity. This study examined effects of socio-institutional and emotional factors as well as economic factors on rental transactions. A stochastic choice model was applied to contingent valuation data by considering regional heteroscedasticity. Empirical results showed (1) existence of economic inefficiencies, 3% loss of economic surplus due to socio-institutional restriction, which is probably reflected in transaction costs; (2) a 15% reduction in surplus due to emotional reluctance of farmers; and (3) strong influences of rice price, wages, and geographical location on the rental rate and agreement level.