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Spatial Competition and Farm Tourism - A Hedonic Pricing Model

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  • Andersson, Hans
  • Hoffmann, Ruben

Abstract

Changes in EU agricultural policies towards additional focus on rural development issues raise questions regarding the economic impact of local/spatial competition. Traditionally, farmers have typically been price takers in markets for major agricultural products. This is, however, not necessarily true in the case of local markets for “new enterprises”. This article examines local/and spatial competition for farm tourism services, specifically “Self catering” in Sweden. The results show that spatial dependences exist and have to be considered in the econometric estimation of the hedonic pricing model. Using spatial econometrics it is shown that the price is affected by the average price, the demand for and supply of lodging in the regional market. Notable is that the results indicate that local competition has a positive effect on the price while regional competition has a negative effect. Marketing channels used as well as size and ranking of the service were found to affect the price of lodging. Diversification does not seem to positively affect prices. The findings illustrate the potential importance of local competition for rural developments studies. It also raises questions concerning policies promoting diversification and multifunctionality as a way of revitalizing urban areas.

Suggested Citation

  • Andersson, Hans & Hoffmann, Ruben, 2008. "Spatial Competition and Farm Tourism - A Hedonic Pricing Model," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6156, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea08:6156
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    File URL: http://purl.umn.edu/6156
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    References listed on IDEAS

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    1. Anat Tchetchik & Aliza Fleischer & Israel Finkelshtain, 2008. "Differentiation and Synergies in Rural Tourism: Estimation and Simulation of the Israeli Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(2), pages 553-570.
    2. Philippe Le Goffe, 2000. "Hedonic Pricing of Agriculture and Forestry Externalities," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 15(4), pages 397-401, April.
    3. Garth Holloway & Donald Lacombe & James P. LeSage, 2007. "Spatial Econometric Issues for Bio-Economic and Land-Use Modelling," Journal of Agricultural Economics, Wiley Blackwell, vol. 58(3), pages 549-588, September.
    4. Hema Swaminathan & Jill L. Findeis, 2004. "Policy Intervention and Poverty in Rural America," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(5), pages 1289-1296.
    5. Brian Roe & Elena G. Irwin & Jeff S. Sharp, 2002. "Pigs in Space: Modeling the Spatial Structure of Hog Production in Traditional and Nontraditional Production Regions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(2), pages 259-278.
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    Keywords

    Community/Rural/Urban Development;

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