A Dynamic Stochastic Programming Framework for Modeling Large Scale Land Deals in Developing Countries
| dc.creator | Corato, Luca Di | |
| dc.creator | Hess, Sebastian | |
| dc.date | 2017-04-01T20:03:12Z | |
| dc.date.accessioned | 2026-07-09T07:09:32Z | |
| dc.description | The attractiveness of agricultural land available in developing countries has markedly increased in the last few years. Driven by rising and highly volatile prices for agricul- tural commodities, large land acquisitions have been undertaken by foreign investors. We formalize the discussion surrounding such large scale land deals through a dynamic stochastic programming model. Within this framework, we first determine the value of a land development project under uncertainty about prices for agricultural commodi- ties, political risk and irreversible capital investment. Second, given an exogenously set corporate tax rate, we determine, in both a cooperative and a non-cooperative set- ting, the optimal land rental payment. We show that 1) the optimal policy scheme is equivalent to a risk-sharing contract, 2) trading o¤ rental payment with tax revenue is detrimental for both total project value and domestic benefits and 3) taxation has a neutral impact on long-run the land development pace. We complete our study by illustrating our results through an empirical application based on observed individual land deals from Ethiopia and simulations for a specific crop in a selected region that has recently been targeted by foreign investments. | |
| dc.identifier | doi:10.22004/ag.econ.150190 | |
| dc.identifier | https://ageconsearch.umn.edu/record/150190/files/A%20DSP%20framework%20for%20modeling%20large%20land%20deals_sub_final.pdf | |
| dc.identifier | http://ageconsearch.umn.edu/record/150190 | |
| dc.identifier.uri | http://hdl.handle.net/123456789/585159 | |
| dc.language | eng | |
| dc.publisher | ||
| dc.source | http://ageconsearch.umn.edu/record/150190 | |
| dc.title | A Dynamic Stochastic Programming Framework for Modeling Large Scale Land Deals in Developing Countries | |
| dc.type | Text |