Measuring liquidity in agricultural land markets

Purpose Liquidity is an important aspect of market efficiency. The purpose this paper threefold: first, aims to discuss indicators that provide information about liquidity in agricultural land markets. Second, reflect on determinants and analyze the relationship with prices. Third, conduct empirical analysis for Germany illustrates these concepts allows hypothesis testing. Design/methodology/approach This study reviews dimensions measurement financial markets derives applicable farmland In analysis, exhibits spatial temporal variability Lower Saxony, a German federal state highest production value. uses rich dataset includes 72,547 sale transactions arable between 1990 2018. research focuses volume-based (number transactions, volume turnover) time-based (trading frequency durations) measures. A panel vector autoregression Granger causality tests are applied investigate relation turnover Findings confirms thinness but also reveals regional heterogeneity liquidity. finds prices ambiguous. concludes high demand from expanding farms absorbs supply shocks regardless current price level Originality/value Even though relevance markets’ widely acknowledged literature, one first attempts measure explain its