The incidence of U.S. agricultural subsidies on farmland rental rates

This paper identifies the effect of agricultural subsidies on farmland rental rates in the United States. Rental agreements are primarily between farmers and non-farmer landlords, but no evidence exists concerning the incidence of subsidies on these two groups. By exploiting a unique policy change in 1996 and a nationally representative dataset of individual farms, I solve the endogeneity problem with fixed effects and instrumental variables techniques. I show that non-farmer landlords capture forty percent of the marginal subsidy dollar per acre. This finding is in sharp contrast to the basic assumptions in the literature that suggest full incidence on the landlords. I discuss possible characteristics of the farmland rental market that would result in less than perfect incidence.

Department dc:contributor.department

Massachusetts Institute of Technology. Dept. of Economics.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2004

Author dc:creator

• Kirwan, Barrett E., 1974-

Advisor dc:contributor.advisor

• David H. Autor.

• Economics.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

en_US

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/28816

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/28816