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Niche Markets for Agrobiodiversity Conservation: Preference and Scale Heterogeneity Effects on Nepalese Consumers’ WTP for Finger Millet Products

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  • Giacomo Pallante

    () (Department of Economics and Finance, University of Rome Tor Vergata, Via Columbia 2, Rome, Italy.)

  • Adam Drucker

    () (Bioversity International, Via dei Tre Denari 472, Maccarese, Italy.)

Abstract

Through the implementation of a choice experiment among Nepalese urban consumers, this paper aims to evaluate the effectiveness of a niche product development as market-oriented instrument for the conservation of endangered crops landraces. We compare establisheddiscrete choice models (conditional logit, random parameter logit and latent class) with the novel generalized multinomial logit model in WTP space to account for the preference and the scale heterogeneity effect on the WTP for the finger millet crop. The estimations are utilized to evaluate the impact that a potential price premium has on local rural farmers’ opportunity costs of cultivating the finger millet. Results confirm that, by controlling for heterogeneity, there are segments of population with a WTP that ensures an efficient increase in FM area cultivated. Further, the success of the niche market can attract public investments on the development and conservation of the entire stock of neglected and underutilized local species thereby safeguarding the related agrobiodiversity ecosystem services.

Suggested Citation

  • Giacomo Pallante & Adam Drucker, 2014. "Niche Markets for Agrobiodiversity Conservation: Preference and Scale Heterogeneity Effects on Nepalese Consumers’ WTP for Finger Millet Products," SEEDS Working Papers 1414, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised May 2014.
  • Handle: RePEc:srt:wpaper:1414
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    Keywords

    Agricultural biodiversity; niche market; Nepal; choice experiment; scale heterogeneity; WTP.;

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources

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