Understanding farmers’ land use behavior under different institutional settings

It has been argued since the early days of classical economists that tenancy as compared to land ownership may lead to suboptimal resource allocation and soil degradation. The economic rationale for this is commonly understood to be the differences in the length of farmers’ planning horizons. Given that rental shares are high and constantly increasing in many EU countries, it is important to understand the different impacts of tenancy versus land ownership on farmers’ land use behaviour and investments in land. AES are considered an appropriate response to negative externalities of agricultural production and, therefore, may be an appropriate measure to mitigate effects of insecure land tenure. Formal institutions and economic considerations are important for farmers’ decisions, but social norms, beliefs or values also shape farmers’ motivations and behaviour. Therefore, to fully understand the institutional drivers of farmers’ land use behaviour, we apply economic and socio-psychological theories and Our main contributions are fourfold: i.) we take an integrative approach by combining economic and socio-psychological theories into a model of institutionally shaped land use behaviour; ii.) we enhance the eco-efficiency literature by developing a model that better fits the decisions of family-farm households; iii.) we explore the issue by applying the rather novel HNR approach, which stresses farmers’ relation with nature; iv.) we apply all this, based on two exceptional data sets for Austria: a nationwide, multiple-year dataset on plot level, and farm-level book keeping data linked with survey data collected on the same farms in this project. This project is part of a DFG Research Unit “Agricultural Land Markets – Efficiency and Regulation”.