Land markets and agrarian backwardness (Spain, 1900-1936)

Abstract

To what extent were land markets the cause of Spanish agrarian backwardness? This paper uses new provincial data on average real land prices, together with provincial level variation in land productivity, to analyse land markets efficiency. To address this unresolved issue, we test whether land markets were spatially integrated and whether their prices can be explained with the present value model. Our results suggest that land prices converged across provinces and that variations were driven by fundamentals. In consequence, we conclude that institutional failure in land markets was not the cause of the relatively poor productivity performance of Spanish agricultureLand prices determinants, Price convergence, Panel unit-roots, Present value model