Testing for Market Power in Agricultural Land Markets: Evidence from Ukraine
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Washington, DC: World Bank
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Agricultural land markets are critical for structural transformation but may, as farm sizes increase, also be affected by operators exercising market power. To explore this little-studied issue, this paper uses administrative data for agricultural land lease transactions from 2021 to 2024 in Ukraine. Tenant fixed effect regressions indicate that, compared to village councils where it controlled less than 10 percent of the land before a transaction, the same tenant paid 4 or 7.5 percent ($3.66 or $6.86 per ha and year) less rent. Robustness checks using land sales prices or the length of lease terms yield similar results. Policy implications for Ukraine and beyond are discussed.
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LAND MARKET, PRICES, LAND REFORM, MARKET POWER, PRODUCTIVITY