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Analysis of heterogeneity in the demand for public goods provided by mountain olive groves in Andalusia


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https://doi.org/10.12706/itea.2018.011

Authors: R. Granado‑Díaz, A.J. Villanueva, J.A. Gómez‑Limón y M. Rodríguez‑Entrena
Issue: 114-2 (158-182)
Topic: Agricultural Economics
Keywords: Agricultural policy, biodiversity, soil erosion, rural vitality, choice experiments, latent class model
Summary:

The provision of public goods by agricultural systems has been used in recent times to legitimise policies in agriculture, specially the European Union's Common Agricultural Policy. This paper analyses the demand of Andalusian society with respect to the main public goods provided by mountain olive groves, including environmental (mostly biodiversity) and sociocultural ones (rural vitality), as well as the 'public bad' soil erosion. For this purpose, the choice experiment method has been used with a special focus on preference heterogeneity, using the latent class model as econometric specification. The results point out that three different groups of population can be clearly identified according to their willingness to pay for the public goods provided by mountain olive groves: one group of zero willingness to pay (representing 22% of the sample), another with a low willingness to pay and just for rural vitality (14%), and a third larger group with a high willingness to pay for the three public goods/bads under consideration. The results show that variables related to opinions and attitudes, especially those linked to policy implementation, both directly (private/public, local or not, etc.) and indirectly (acceptance of non‑agricultural provision, preferences for olive oil, etc.), can better explain group belonging. These results can be of special relevance to internalise social demands in the design of public policies.

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