Geographical Labeling of Agri-Food Products and its Incidence on the Cross-Sectional Approach to Climate Change Impacts Assessment

The cross-sectional approach to the assessment of climate change impacts on agriculture is a widely used technique. It is based on land prices and supposes a perfect mobility of agricultural activities following climate evolution. Theory and our empirical study of the French land market show that land prices do not only reflect the land rent related to productivity. We argue, that geographical labeling represents a component of land prices which is space invariant. Thus, present rents related to geographical labeling cannot be transferred to new regions, as a cross-sectional analysis would suggest.