Spatial Analysis of Factors Affecting Finnish Farmland Prices

The purpose of the study was to find out the factors affecting farmland prices in Finland. A hedonic pricing model that takes into account the presence of spatial dependence was applied for a very large sales price data (6 281 observations). The results confirmed the importance of land quality and the structural change as determinants of land price. In addition, off-farm job possibilities seemed to have a significant role in determining land prices. The effect of government payments on land prices was also clear, even though the support does not explain very much of the differences in land prices between regions.