Land improvement has both direct and indirect economic effects on agricultural production. Besides of its direct economic effects on agricultural production by improving efficiency of agricultural production, the indirect economic effects of land improvement can also be obtained through reduction of production costs such as the improvement of production structure or improvement in profitability such as introducing high profit crops. Such economic effects (both direct and indirect) of land improvement will be finally reflected into land profitability. Therefore, it is considered that we can estimate economic effects of land improvement by measuring the relation of the land capital stock and land profitability in agricultural sector. However, economic effects of land improvement are usually influenced by regional difference and structural change in agriculture. Thus, in order to make an accurate estimation, we apply the panel data analysis to the data at 2 points of time of each city, town and village of Niigata prefecture instead of using cross-section data or time series data as a usual way of estimation, and clarify the economic effects of land improvement in this area.

JEL classification : C33, Q15, Q18, R10