The potential for industrial activity among EU regions
an empirical analysis at the NUTS2 level
Lebenswissenschaftliche Fakultät
In the last decade, many parts of the world experienced severe increases in agricultural land
prices. This price surge, however, did not take place evenly in space and time. To better
understand the spatial and temporal behavior of land prices, we employ a price diffusion model
that combines features of market integration models and spatial econometric models. An
application of this model to farmland prices in Germany shows that prices on a county-level
are cointegrated. Apart from convergence towards a long-run equilibrium, we find that price
transmission also proceeds through short-term adjustments caused by neighboring regions.
