Social Capital and the Terms of Trade for Farmland
Social capital is a person or group's sympathy for or sense of obligation to another person or group. This article introduces social capital into a neoclassical model of farmland exchange and shows how relationships alter the terms of trade. Empirical evidence from a survey of farmers shows that the type of relationship farmland sellers have with farmland buyers has a statistically significant and economically important effect on the minimum-sell price for farmland. Compared to the minimum-sell price when selling to a total stranger in an arm's-length transaction, farmland sellers discount prices to friendly neighbors and relatives and require a premium from unfriendly neighbors and influential people in the community. Copyright 2002, Oxford University Press.
Year of publication: |
2002
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Authors: | Robison, Lindon J. ; Myers, Robert J. ; Siles, Marcelo E. |
Published in: |
Review of Agricultural Economics. - Agricultural and Applied Economics Association - AAEA, ISSN 2040-5790. - Vol. 24.2002, 1, p. 44-58
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Publisher: |
Agricultural and Applied Economics Association - AAEA |
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