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The Environmental Supply of Farm Households: A Flexible Willingness to Accept Model

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  • P. Dupraz
  • D. Vermersch
  • B. De Frahan
  • L. Delvaux

Abstract

The purpose of the paper is toanalyse farmers' participation inenvironmental schemes, which are gaining agrowing importance within the Europeanagricultural policy. These schemes areimplemented through voluntary contracts thatpay farmers for the provision of environmentalservices. The microeconomic model that isdeveloped is a farm household model thatincorporates the producer and consumerbehaviour of the farmer to optimise hisenvironmental supply considering that theenvironmental service that he is supplying alsohas the characteristics of a public good. Defined as the difference between the profitloss in providing the environmental service andthe willingness to pay to consume this service,the household's “willingness to accept” (WTA)is compared with two flexible WTA measures thataccount for the technological flexibility ofthe environmental supply. Data come from asurvey of an agri-environmental schemeimplemented in the Walloon region of Belgiumsince 1995 and intended to protect the nestingof some endangered bird species. Econometricresults show that contingent valuation is areliable method to reveal the behaviours offarmers facing the invitation to participate inthis scheme. They also confirm that farmerbehaviour is also influenced by environmental preference. Copyright Kluwer Academic Publishers 2003

Suggested Citation

  • P. Dupraz & D. Vermersch & B. De Frahan & L. Delvaux, 2003. "The Environmental Supply of Farm Households: A Flexible Willingness to Accept Model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 25(2), pages 171-189, June.
  • Handle: RePEc:kap:enreec:v:25:y:2003:i:2:p:171-189
    DOI: 10.1023/A:1023910720219
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    References listed on IDEAS

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    1. Neary, J. P. & Roberts, K. W. S., 1980. "The theory of household behaviour under rationing," European Economic Review, Elsevier, vol. 13(1), pages 25-42, January.
    2. F. Bonnieux & P. Rainelli & D. Vermersch, 1998. "Estimating the Supply of Environmental Benefits by Agriculture: A French Case Study," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 11(2), pages 135-153, March.
    3. Merlo, Maurizio & Ferro, Ottone & Povellato, Andrea, 1995. "Valuation and Remuneration of Countryside Stewardship Performed by Agriculture and Forestry," 1994 Conference, August 22-29, 1994, Harare, Zimbabwe 183402, International Association of Agricultural Economists.
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