Efficient Supply of Cultural Landscape in a CGE Framework
AbstractIt is often assumed that the agricultural sector produces public goods or positive externalities that benefit the domestic consumers, in addition to its production of private goods. Efficient agricultural support is consequently directed towards resolving market failures caused by the existence of these public goods or externalities. We illustrate how this can be achieved in a Computable General Equilibrium model for one multifunctional aspect of agricultural production, namely the production of cultural landscape. Using a public good modeling framework as point of departure, we develop supply- and willingness to pay functions for cultural landscape. Governmental agricultural support is adjusted to achieve efficient supply of the public good. As an illustration we apply our framework using a general equilibrium model for Norway. We show that efficient supply of cultural landscape can be achieved even with a tremendous reduction in initial overall support of agricultural production.
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Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 2008 International Congress, August 26-29, 2008, Ghent, Belgium with number 44170.
Date of creation: 2008
Date of revision:
CGE modeling; Multifunctionality; Public Goods; Land Economics/Use;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-25 (All new papers)
- NEP-CMP-2008-11-25 (Computational Economics)
- NEP-CUL-2008-11-25 (Cultural Economics)
- NEP-PBE-2008-11-25 (Public Economics)
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- Rigoberto A. Lopez & Farhed A. Shah & Marilyn A. Altobello, 1994. "Amenity Benefits and the Optimal Allocation of Land," Land Economics, University of Wisconsin Press, vol. 70(1), pages 53-62.
- Rutherford, Thomas F, 1999. "Applied General Equilibrium Modeling with MPSGE as a GAMS Subsystem: An Overview of the Modeling Framework and Syntax," Computational Economics, Society for Computational Economics, vol. 14(1-2), pages 1-46, October.
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