Land – price determinants using the spatial econometrics modeling in the Moldavian real estate

Abstract

The purpose of this paper is to determine the factors which influence the land market in Republic of Moldova. The paper aims to discover the determinants for land pricing using the spatial econometrics modeling, as it is widely used when the spatial component is present. The country’s agricultural economy combined with the interest of international organizations and limited data availability directed the focus of this empirical study towards land for agricultural purposes. The factors which determine the land market (for agricultural purposes) in Republic of Moldova are mainly related to economic characteristics of land, such as field productivity, the position on the local landscape (characterized by angle and soil quality), proximity to local or national roads (due to storage and transportation reasons), and economic characteristics of owners. Also, another important role in land market price creation is the pressure of urban space to transform land for agricultural use close to cities and villages in spaces for industrial or residential purposes. This is characterized by the financial pressure from the urban centers which has become significant in land transactions.