IDEAS home Printed from https://ideas.repec.org/a/eee/resene/v52y2018icp87-101.html
   My bibliography  Save this article

Farmers’ willingness to participate in collective biogas investment: A discrete choice experiment study

Author

Listed:
  • Zemo, Kahsay Haile
  • Termansen, Mette

Abstract

Biogas production may make an important contribution to multiple policy objectives, i.e. the transition to renewable energy, increased recycling of agricultural waste and reduction in greenhouse gas emission from agriculture. Despite the role of biogas in achieving these wider benefits, the engagement of stakeholders such as farmers has been low and the barriers to their participation in biogas production is not well understood. This study examines farmers’ willingness to participate in a unique, manure-based collective biogas investment based on a discrete choice experiment study of Danish farmers. Our results show that the majority of farmers, including farmers who never considered investing in biogas before and farmers that already participate in conventional biogas plants, are interested in a partnership-based biogas investment (PBI). A mixed logit model with flexible distribution shows that farmers’ participation in PBI is mainly motivated by a moderate number of partner farmers, short distance between the farm and the plant, contract options to sell biogas, an option to cancel the partnership, and free startup consultancy. Farmers are willing to accept a significant reduction in subsidy to acquire favorable aspects of the PBI. A second stage analysis of farmers’ intensity of participation also reveals that an increase in livestock units, involvement in off-farm activity, increase in farm size, and positive view towards investment enhance willingness to supply manure. Linking results from discrete choice and corner solution models, we estimate the average manure supply to a partnership-based biogas plant to be around 96,000 tons/year.

Suggested Citation

  • Zemo, Kahsay Haile & Termansen, Mette, 2018. "Farmers’ willingness to participate in collective biogas investment: A discrete choice experiment study," Resource and Energy Economics, Elsevier, vol. 52(C), pages 87-101.
    • Handle: RePEc:eee:resene:v:52:y:2018:i:c:p:87-101
    DOI: 10.1016/j.reseneeco.2017.12.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0928765517301379
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.reseneeco.2017.12.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mzoughi, Naoufel, 2011. "Farmers adoption of integrated crop protection and organic farming: Do moral and social concerns matter?," Ecological Economics, Elsevier, vol. 70(8), pages 1536-1545, June.
    2. Timothy G. Conley & Christopher R. Udry, 2010. "Learning about a New Technology: Pineapple in Ghana," American Economic Review, American Economic Association, vol. 100(1), pages 35-69, March.
    3. Anastasio J. Villanueva & Klaus Glenk & Macario Rodríguez-Entrena, 2017. "Protest Responses and Willingness to Accept: Ecosystem Services Providers’ Preferences towards Incentive-Based Schemes," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(3), pages 801-821, September.
    4. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    5. Fosgerau, Mogens & Mabit, Stefan L., 2013. "Easy and flexible mixture distributions," Economics Letters, Elsevier, vol. 120(2), pages 206-210.
    6. Jacobsen, Brian H. & Laugesen, Frederik M. & Dubgaard, Alex, 2014. "The economics of biogas in Denmark: a farm and socioeconomic perspective," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 3(3), pages 1-10.
    7. Pindyck, Robert S, 1991. "Irreversibility, Uncertainty, and Investment," Journal of Economic Literature, American Economic Association, vol. 29(3), pages 1110-1148, September.
    8. Stine Broch & Suzanne Vedel, 2012. "Using Choice Experiments to Investigate the Policy Relevance of Heterogeneity in Farmer Agri-Environmental Contract Preferences," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 51(4), pages 561-581, April.
    9. Scarpa, R. & Thiene, M. & Train, K., 2008. "Appendix to Utility in WTP space: a tool to address confounding random scale effects in destination choice to the Alps," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 90(4), pages 1-9, January.
    10. Brudermann, Thomas & Reinsberger, Kathrin & Orthofer, Anita & Kislinger, Martin & Posch, Alfred, 2013. "Photovoltaics in agriculture: A case study on decision making of farmers," Energy Policy, Elsevier, vol. 61(C), pages 96-103.
    11. Czajkowski, Mikołaj & Budziński, Wiktor, 2019. "Simulation error in maximum likelihood estimation of discrete choice models," Journal of choice modelling, Elsevier, vol. 31(C), pages 73-85.
    12. Richard Carson & Theodore Groves, 2007. "Incentive and informational properties of preference questions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 181-210, May.
    13. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387.
    14. Fewell, Jason E. & Bergtold, Jason S. & Williams, Jeffery R., 2016. "Farmers' willingness to contract switchgrass as a cellulosic bioenergy crop in Kansas," Energy Economics, Elsevier, vol. 55(C), pages 292-302.
    15. Convery, I. & Robson, D. & Ottitsch, A. & Long, M., 2012. "The willingness of farmers to engage with bioenergy and woody biomass production: A regional case study from Cumbria," Energy Policy, Elsevier, vol. 40(C), pages 293-300.
    16. Salm, Sarah & Hille, Stefanie Lena & Wüstenhagen, Rolf, 2016. "What are retail investors' risk-return preferences towards renewable energy projects? A choice experiment in Germany," Energy Policy, Elsevier, vol. 97(C), pages 310-320.
    17. Skovsgaard, Lise & Jacobsen, Henrik Klinge, 2017. "Economies of scale in biogas production and the significance of flexible regulation," Energy Policy, Elsevier, vol. 101(C), pages 77-89.
    18. Hoyos, David, 2010. "The state of the art of environmental valuation with discrete choice experiments," Ecological Economics, Elsevier, vol. 69(8), pages 1595-1603, June.
    19. Christensen, Tove & Pedersen, Anders Branth & Nielsen, Helle Oersted & Mørkbak, Morten Raun & Hasler, Berit & Denver, Sigrid, 2011. "Determinants of farmers' willingness to participate in subsidy schemes for pesticide-free buffer zones--A choice experiment study," Ecological Economics, Elsevier, vol. 70(8), pages 1558-1564, June.
    20. Cristina Bicchieri, 2010. "Norms, preferences, and conditional behavior," Politics, Philosophy & Economics, , vol. 9(3), pages 297-313, August.
    21. Brian Roe & Thomas L. Sporleder & Betsy Belleville, 2004. "Hog Producer Preferences for Marketing Contract Attributes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 115-123.
    22. Altman, Ira & Bergtold, Jason & Sanders, Dwight & Johnson, Tom, 2015. "Willingness to supply biomass for bioenergy production: A random parameter truncated analysis," Energy Economics, Elsevier, vol. 47(C), pages 1-10.
    23. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
    24. Søren Olsen, 2009. "Choosing Between Internet and Mail Survey Modes for Choice Experiment Surveys Considering Non-Market Goods," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 44(4), pages 591-610, December.
    25. Andrew Daly & Stephane Hess & Kenneth Train, 2012. "Assuring finite moments for willingness to pay in random coefficient models," Transportation, Springer, vol. 39(1), pages 19-31, January.
    26. Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall.
    27. Jakki Mohr & Robert Spekman, 1994. "Characteristics of partnership success: Partnership attributes, communication behavior, and conflict resolution techniques," Strategic Management Journal, Wiley Blackwell, vol. 15(2), pages 135-152, February.
    28. Riccardo Scarpa & Mara Thiene & Kenneth Train, 2008. "Utility in Willingness to Pay Space: A Tool to Address Confounding Random Scale Effects in Destination Choice to the Alps," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(4), pages 994-1010.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. He, Ke & Zhang, Junbiao & Wang, Anbang & Chang, Huayi, 2020. "Rural households’ perceived value of energy utilization of crop residues: A case study from China," Renewable Energy, Elsevier, vol. 155(C), pages 286-295.
    2. Giorgio Provolo & Gabriele Mattachini & Alberto Finzi & Martina Cattaneo & Viviana Guido & Elisabetta Riva, 2018. "Global Warming and Acidification Potential Assessment of a Collective Manure Management System for Bioenergy Production and Nitrogen Removal in Northern Italy," Sustainability, MDPI, vol. 10(10), pages 1-18, October.
    3. Obal, Thalita Monteiro & de Souza, Jovani Taveira & de Jesus, Rômulo Henrique Gomes & de Francisco, Antonio Carlos, 2023. "Biogascluster: A clustering algorithm to identify potential partnerships between agribusiness properties," Renewable Energy, Elsevier, vol. 206(C), pages 982-993.
    4. Alberto Finzi & Gabriele Mattachini & Daniela Lovarelli & Elisabetta Riva & Giorgio Provolo, 2020. "Technical, Economic, and Environmental Assessment of a Collective Integrated Treatment System for Energy Recovery and Nutrient Removal from Livestock Manure," Sustainability, MDPI, vol. 12(7), pages 1-18, April.
    5. Zhaohui Zhang & Krishna P. Paudel & Kamal Upadhyaya, 2023. "Preference for rural living environment improvement initiatives in China," American Journal of Economics and Sociology, Wiley Blackwell, vol. 82(1), pages 61-78, January.
    6. Nicholas S. Caros & Jinhua Zhao, 2022. "Preparing urban mobility for the future of work," Papers 2201.01321, arXiv.org.
    7. Rong Zhao & Xiaolu Qiu & Shaozhi Chen, 2021. "Empirical Study on the Effects of Technology Training on the Forest-Related Income of Rural Poverty-Stricken Households—Based on the PSM Method," Sustainability, MDPI, vol. 13(13), pages 1-12, June.
    8. He, Ke & Zhang, Junbiao & Zeng, Yangmei, 2020. "Households’ willingness to pay for energy utilization of crop straw in rural China：Based on an improved UTAUT model," Energy Policy, Elsevier, vol. 140(C).
    9. Eeva ALHO, 2019. "Farmers’ Willingness To Invest In New Cooperative Instruments: A Choice Experiment," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 90(1), pages 161-186, March.
    10. Demel, Simona & Longo, Alberto & Mariel, Petr, 2020. "Trading off visual disamenity for renewable energy: Willingness to pay for seaweed farming for energy production," Ecological Economics, Elsevier, vol. 173(C).
    11. Shuangjin Wang & Yuan Tian & Xiaowei Liu & Maggie Foley, 2019. "How Farmers Make Investment Decisions: Evidence from a Farmer Survey in China," Sustainability, MDPI, vol. 12(1), pages 1-19, December.
    12. Dmytro Serebrennikov & Fiona Thorne & Zein Kallas & Sinéad N. McCarthy, 2020. "Factors Influencing Adoption of Sustainable Farming Practices in Europe: A Systemic Review of Empirical Literature," Sustainability, MDPI, vol. 12(22), pages 1-23, November.
    13. Gillianne Bowman & Thierry Huber & Vanessa Burg, 2023. "Linking Solar and Biomass Resources to Generate Renewable Energy: Can We Find Local Complementarities in the Agricultural Setting?," Energies, MDPI, vol. 16(3), pages 1-17, February.
    14. Qiang Wang & Thomas Dogot & Guosheng Wu & Xianlei Huang & Changbin Yin, 2019. "Residents’ Willingness for Centralized Biogas Production in Hebei and Shandong Provinces," Sustainability, MDPI, vol. 11(24), pages 1-16, December.
    15. Zemo, Kahsay Haile & Panduro, Toke Emil & Termansen, Mette, 2019. "Impact of biogas plants on rural residential property values and implications for local acceptance," Energy Policy, Elsevier, vol. 129(C), pages 1121-1131.
    16. Xiaohong Zhou & Donghong Ding, 2022. "Factors Influencing Farmers’ Willingness and Behaviors in Organic Agriculture Development: An Empirical Analysis Based on Survey Data of Farmers in Anhui Province," Sustainability, MDPI, vol. 14(22), pages 1-21, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Salazar-Ordóñez, Melania & Rodríguez-Entrena, Macario & Villanueva, Anastasio J., 2021. "Exploring the commodification of biodiversity using olive oil producers’ willingness to accept," Land Use Policy, Elsevier, vol. 107(C).
    2. Sandorf, Erlend Dancke & Aanesen, Margrethe & Navrud, Ståle, 2016. "Valuing unfamiliar and complex environmental goods: A comparison of valuation workshops and internet panel surveys with videos," Ecological Economics, Elsevier, vol. 129(C), pages 50-61.
    3. Bougherara, Douadia & Lapierre, Margaux & Préget, Raphaële & Sauquet, Alexandre, 2021. "Do farmers prefer increasing, decreasing, or stable payments in Agri-environmental schemes?," Ecological Economics, Elsevier, vol. 183(C).
    4. West, Grant H. & Snell, Heather & Kovacs, Kent & Nayga, Rodolfo M., 2020. "Estimation of the preferences for the intertemporal services from groundwater," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304220, Agricultural and Applied Economics Association.
    5. Robert J. Johnston & Tom Ndebele & David A. Newburn, 2023. "Modeling transaction costs in household adoption of landscape conservation practices," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(1), pages 341-367, January.
    6. Dissanayake,Sahan T. M. & Beyene,Abebe Damte & Bluffstone,Randall & Gebreegziabher, Zenebe & Martinsson,Peter & Mekonnen,Alemu & Toman,Michael A. & Vieider,Ferdinand M., 2015. "Preferences for REDD+ contract attributes in low-income countries : a choice experiment in Ethiopia," Policy Research Working Paper Series 7296, The World Bank.
    7. Robert J. Johnston & Kevin J. Boyle & Wiktor (Vic) Adamowicz & Jeff Bennett & Roy Brouwer & Trudy Ann Cameron & W. Michael Hanemann & Nick Hanley & Mandy Ryan & Riccardo Scarpa & Roger Tourangeau & Ch, 2017. "Contemporary Guidance for Stated Preference Studies," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(2), pages 319-405.
    8. Lapierre, Margaux & Le Velly, Gwenolé & Bougherara, Douadia & Préget, Raphaële & Sauquet, Alexandre, 2023. "Designing agri-environmental schemes to cope with uncertainty," Ecological Economics, Elsevier, vol. 203(C).
    9. Gillespie Rob & Kragt Marit E., 2012. "Accounting for Nonmarket Impacts in a Benefit-Cost Analysis of Underground Coal Mining in New South Wales, Australia," Journal of Benefit-Cost Analysis, De Gruyter, vol. 3(2), pages 1-29, May.
    10. Weller, Priska & Elsasser, Peter, 2018. "Preferences for forest structural attributes in Germany – Evidence from a choice experiment," Forest Policy and Economics, Elsevier, vol. 93(C), pages 1-9.
    11. Malte Welling & Ewa Zawojska & Julian Sagebiel, 2022. "Information, Consequentiality and Credibility in Stated Preference Surveys: A Choice Experiment on Climate Adaptation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(1), pages 257-283, May.
    12. Riccardo Scarpa & Cristiano Franceschinis & Mara Thiene, 2017. "A Monte Carlo Evaluation of the Logit-Mixed Logit under Asymmetry and Multimodality," Working Papers in Economics 17/23, University of Waikato.
    13. Benoit Chèze & Charles Collet & Anthony Paris, 2021. "Estimating discrete choice experiments : theoretical fundamentals," CIRED Working Papers hal-03262187, HAL.
    14. Cerroni, S. & Watson, V. & Macdiarmid, J., 2018. "Preferences for healthy and environmentally sustainable food: Combining induced-value and home-grown experiments," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277155, International Association of Agricultural Economists.
    15. Tensay Meles & L. (Lisa B.) Ryan & Sanghamitra Mukherjee, 2019. "Preferences for Renewable Home Heating: A Choice Experiment Study of Heat Pump System in Ireland," Open Access publications 10197/11467, School of Economics, University College Dublin.
    16. Daan Hulshof & Machiel Mulder, 2020. "Willingness to Pay for $$\hbox {CO}_2$$CO2 Emission Reductions in Passenger Car Transport," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 75(4), pages 899-929, April.
    17. Dan Pan, 2016. "The Design of Policy Instruments towards Sustainable Livestock Production in China: An Application of the Choice Experiment Method," Sustainability, MDPI, vol. 8(7), pages 1-18, July.
    18. Daniele Moro & Mario Veneziani & Paolo Sckokai & Elena Castellari, 2015. "Consumer Willingness to Pay for Catechin‐enriched Yogurt: Evidence from a Stated Choice Experiment," Agribusiness, John Wiley & Sons, Ltd., vol. 31(2), pages 243-258, April.
    19. Sckokai, Paolo & Veneziani, Mario & Moro, Daniele & Castellari, Elena, 2014. "Consumer willingness to pay for food safety: the case of mycotoxins in milk," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 3(1), pages 1-19, April.
    20. Linda Arata & Gianni Guastella & Stefano Pareglio & Riccardo Scarpa & Paolo Sckokai, 2018. "Periurban Agriculture: do the Current EU Agri-environmental Policy Programmes Fit with it?," Working Papers 2018.16, Fondazione Eni Enrico Mattei.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:resene:v:52:y:2018:i:c:p:87-101. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505569 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.