EU Science Hub

Land Supply Elasticities

Land Supply Elasticities
©EU
Abstract: 
The land supply elasticity with respect to the land price (land rent) is a key parameter in determining the land supply impacts of economic shocks and policies and the resulting impacts on food prices and food and nutrition security. For example, Elobeid at al., 2011 shows that halving the area expansion elasticities leads to 15% lower land expansion in Brazil necessary for 25% increase in ethanol consumption. However, values for land supply elasticities are rarely available in the literature. Due to lack of reliable time series data on land prices and concerns about the quality of Utilised Agricultural Area data, they are only available estimated for some countries of the world. In this overview we calculate land supply elasticities for several world regions and countries adapting method proposed in the literature and showing available published estimates. A comparison between current and new values of MAGNET land elasticities can be found in Appendix C. Appendix D gives a quick operating instruction on how to run MAGNET using the new land set of land supply elasticities in MAGNET.