comparing it to actual and trimmed market prices as well as, subject to data availability, the NMV,<sup>27</sup> assess the difference between different that a shift to market-based valuation would make.

Table 5 rows 4-7 report, respectively the mean actual price, the predicted price from the regression model, the average prices computed using a 10-observation threshold per administrative unit and the NMV. For ease of interpretation, rows 8-10 provide the difference between the NMV and the regional average, the predicted and the actual price. For the entire sample, the predicted price of US$ 994/ha is 24% above the NMV, below the actual price (32.8%).

National figures conceal considerable inter-regional variation: predicted land values using our model are close to the NMV in the East and the South but 24.8%, 22.9%, and 80.2% above it in the North, Center, and West, respectively. Using the NMV as a basis for valuing or taxing land would ignore recent interregional shifts in economic opportunity and, for example, impose an unjustified tax burden on regions negatively affected by the war while making it impossible for owners in the West to leverage the full value of their land as collateral for investment.

# **4.3 Potential refinements and extensions**

Several refinements in terms of adding additional parcel characteristics could potentially be considered. First, we used the admittedly coarse share of built-up area from sentinel imagery as a measure of built area. A digital address or building register or commercially available building footprints could be possible alternatives. Second, geographical characteristics including elevation, slope, and north and east exposure vary little across parcels used for commercial agriculture in Ukraine that are mostly flat and located at low altitudes but will need to be considered if land for personal farming is included. Third, no information was available on access to irrigation facilities as responsible authorities are still in the process of establishing a registry of public irrigation assets. Cadastral blocks’ high level of granularity of (with an average size of less than 2 km<sup>2</sup> ) together with the rather high volume of land market activity in areas suitable for irrigation (not all of which may currently be operational) suggest that cadastral block fixed effects may absorb most of the land value effect of public irrigation infrastructure, though testing this with actual data, once available, is desirable.

It will also be important to expand our analysis to include other types of agricultural and non-agricultural land use.<sup>28</sup> Doing so will require to overcome the legal separation of land parcels and buildings or structures on them that is common in post-socialist countries. This not only implies that prices for land and buildings

> 27 Owing to idiosyncrasies in the way NMVs at parcel level were recorded, NMV values are available for only about 1.2 million land parcels. SGC is currently working on establishing a database with API connectivity that should provide NMVs for all parcels in the country by early 2025. 28 Land in Ukraine is classified in a wide number of land use classes (e.g., as crop land, hay fields, pastures, or unsuitable for agriculture) that may or may not correspond to actual use. If such data were available, overlaying them with actual land use and soil quality would be desirable.

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