Land markets in economy theory

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This work applies neoclassical theory and New Institutional Economics to understand the market as an institution of exchange, focusing specifically on the agricultural land market. While the findings may not be universally applicable due to the specific nature of this market as a factor rather than a commodity market, it serves as a valuable example for defining a market. The choice of agricultural land as the subject of analysis is significant, particularly in third-world and transition countries where agriculture remains a vital sector. Here, access to and control over land is crucial, as highlighted by Deininger and Feder, who state that in agrarian societies, land is essential for generating livelihoods. The assignment of land rights directly influences households' abilities to produce for subsistence and generate surplus. When certain individuals or groups are systematically restricted from accessing land, it can lead to stark economic disparities. Furthermore, land serves multiple economic functions beyond production, including wealth accumulation, generational wealth transfer, and providing security during hardships. In contexts where other savings mechanisms are unreliable, land becomes a critical asset for financial stability and security in markets.