Empirical Analysis on Factors of Land Abandonment based on Household Model

Abstract

This study aims to examine the factors that induced farmland abandonment in Japan. First, we adopt the household model to evaluate which factors influence the derived demand of farmland and how they do so. Second, we estimate an empirical model to evaluate the validity of the household model and examine the factors that drove land abandonment. The theoretical and empirical result revealed that if the supply of labor in the rural areas is limited, aging in rural areas decreases the derived demand of farmland which in turn results in arising farmland abandonment.