Journal
ECOLOGICAL ECONOMICS
Volume 193, Issue -, Pages -Publisher
ELSEVIER
DOI: 10.1016/j.ecolecon.2021.107286
Keywords
Cultural ecosystem services; Extra virgin olive oil; Italy; Experimental economics
Funding
- University of Perugia
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The research shows that traditional agricultural landscapes providing cultural ecosystem services can have market value, with consumers willing to pay a higher price for food products with a traditional agricultural landscape certification. Additionally, when combined with other certifications, the premium price for the traditional agricultural landscape certification exhibits sub-additivity.
Traditional agricultural landscapes provide cultural ecosystem services to human communities. However, the limited profitability of these landscapes often discourages farmers from preserving them. The current research evaluates: (i) whether the market would reward farmers providing a cultural ecosystem service, through an increased willingness to pay (WTP), for a food product with a traditional agricultural landscape certification; and (ii) what happens to the WTP when a food product reports multiple certifications, including the traditional agricultural landscape one. A convenience sample of Italian extra-virgin olive oil (EVOO) buyers was involved in a non-hypothetical random nth price auction to determine the WTP for 250 ml EVOO bottles carrying different certification bundles. These bundles were composed of different combinations of three certifications: Organic, Protected Designation of Origin, and a traditional agricultural landscape certification associated with the preservation of terraced olive groves. The findings indicate that the traditional agricultural landscape certification receives a premium price both when EVOO carries it individually or combined with other labels. In the latter case, results show sub-additivity of premium prices. The current research proves that traditional agricultural landscapes are not necessarily bound to market failure; however, costs faced by farmers to maintain them can be rewarded through the market.
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