WAS THERE A CONVERGENCE IN THE PRICE OF AGRICULTURAL LAND IN BRAZIL FROM 1979 TO 2005?

Abstract

In this article, we test the occurrences of convergence β and σ in land prices for crops and pastures between Brazilian states, considering the years 1979 to 2005, and using spatial econometrics. Seeking to diagnose non-continuous phenomena, the 27 years analyzed were considered from 1979 to 1989, from 1989 to 1999, from 1999 to 2005 and the total period. It was found that the hypothesis of absolute β-convergence of land prices for crops and pasture, considering averages of these prices by states, was not rejected in the entire period (from 1979 to 2005), as well as in the sub-period from 1989 to 1999. In the case of the σ-convergence analysis, however, this hypothesis was only not rejected for the sub-period from 1989 to 1999. In these years, the convergence process was conditioned by factors such as exchange rate appreciation, trade opening and deregulation of supported activities by the government, such as coffee and wheat farming.