Heterogeneity in irrigators’ wtp and wta for water reliability

This paper is focused on the valuation of irrigation water supply reliability. We assess WTP and WTA for improvements and worsenings in irrigation water supply reliability, checking for the first time the disparity between average WTA and average WTP for this attribute of irrigation water supply. This assessment relies on a field experiment among farmers in an irrigated area located in southern Spain that is suffering a serious deterioration of water supply reliability because of climate change. Results obtained show average WTP estimates for moderate and significant improvements are €16.5 and €18.5/ha/year, respectively, while the average WTA estimates for moderate and significant worsenings are €765.6 and €881.1/ha/year. This indicates a very high WTA/WTP ratio of 46.4 and 47.6 for moderate and significant changes, much higher than those obtained in previous studies. Possible reasons which may explain such a disparity include reasons within neoclassical economic theory and endowment effects

Heterogeneity in the WTA-WTP disparity for irrigation water reliability

This paper assesses the WTP and WTA for improvements and deteriorations, respectively, in irrigation water supply reliability. The assessment relies on a double-sided discrete choice experiment valuation using latent-class modeling accounting for preference and scale heterogeneity. This valuation approach is empirically implemented using a case study of a Spanish irrigated district significantly impacted by climate change. The results obtained show individual-specific preference heterogeneity in the WTA-WTP disparity, primarily driven by the different impacts of water reliability on farmers' utility (changes in business revenues and costs, uncertainty in business performance, and farm income effects) and interindividual differences in loss aversion (different degrees of endowment effect). Additionally, the significant scale heterogeneity and ordering effects found suggest that it may be advisable to use modeling approaches that account for them. Several policy-relevant implications can be drawn, including the non-neutrality of the initial allocation of property rights, repercussions on the cost-benefit of climate change adaptation measures, and the need to account for irrigators’ preference heterogeneity in order to design successful market-based instruments

Heterogeneity of farmers’ preferences towards agri-environmental schemes across different agricultural sub-systems

Specialised literature on the uptake of agri-environmental schemes (AES) has paid little attention to how this can be influenced by the different types of agricultural systems. This paper analyses the heterogeneity of farmers’ preferences towards these schemes, distinguishing between different sub-systems within the same agricultural system. We use the choice experiment method to analyse the case study of three olive grove sub-systems in southern Spain, with the sub-systems ranging from extensive to intensive. The results reveal inter and intra sub-system heterogeneity of farmers’ preferences towards AES both in general and specifically related to scheme attributes. A variety of factors appear to lie behind inter sub-system heterogeneity, especially those associated with sub-system specificities (principally, the type of joint production). Likewise, numerous factors play a role in intra sub-system heterogeneity, most of them related to farm/farmer socioeconomic and physical characteristics. These findings will help in the design of more efficient AE

Factors influencing farmers’ adoption of ecological reconversion agri-environmental schemes in mountain olive groves

Mountain olive groves are characterized by low profitability, mainly due to their location in high steep-slope areas with poor, shallow soils. Consequently, they present a high risk of abandonment of the productive activity, which would be eventually associated with high potential environmental and socio-cultural losses. As an alternative, an ecological reconversion scheme is proposed to increase the provision of ecosystem services from this agroecosystem while reducing the socio-economic impacts related to the abandonment. Two alternative schemes are proposed, which differ in the possibility or not of harvesting the olive production. A double-bounded contingent valuation exercise is used in a sample of Andalusian mountain olive growers to assess their willingness to accept (WTA) for participating in these schemes, using a difference-in-utility model with a linear utility function with correlation between the participation choices in the two schemes as econometric specification. The results show high levels of mean WTA, higher for the scheme precluding harvesting, indicating that higher levels of payment are needed to get some acceptance from farmers. Results also show that structural (e.g., yield) and attitudinal factors (e.g., opinion about setting-aside low productivity olive groves for environmental reasons), among others, significantly influence farmers’ WTA for these schemes

Profitability of olive mill pomace composting as a bioeconomy alternative

La bioeconomía circular está muy presente en la agenda política actual, como consecuencia de la preocupación de la sociedad por el medio ambiente. Este nuevo paradigma se presenta como una oportunidad para el sector del olivar y de los aceites de oliva, dada la gran cantidad de subproductos que genera y su potencial de valorización. Entre las alternativas existentes para la valorización del alperujo y el hojín producido en las almazaras, el compostaje se presenta como una alternativa técnicamente viable, a pesar de lo cual su implantación es escasa. El objetivo de este estudio es analizar la rentabilidad financiera del compostaje de subproductos de la almazara, identificar los principales factores que la determinan y realizar un análisis de sensibilidad de estos. Para ello, se ha analizado la inversión necesaria y los costes de explotación de la actividad de compostaje, arrojando como resultado un margen comercial negativo (-3,64 €/t de compost), considerando la situación actual. No obstante, el margen comercial pasa a ser positivo (+9,52 €/t de compost) al no considerar el coste de oportunidad relativo a la venta del alperujo a la extractora. El análisis de sensibilidad indica que el precio de dicha venta, el precio del combustible y el precio del estiércol son los principales factores limitantes para la rentabilidad de la actividad. Asimismo, se incluye un análisis pormenorizado del efecto de la distancia a la extractora sobre el coste de producción del compost, obteniéndose que para distancias superiores a los 54 km el margen comercial es positivo.The circular bioeconomy is top-ranked among the priorities of the political agenda due to society's concern for the environment. This new paradigm is presented as an opportunity for the olive oil sector due to the large quantities of by products generated and their potential for valorization. Among the existing alternatives for valorizing olive pomace and olive leaves produced in olive mills, composting is presented as a technically feasible alternative, although its implementation is scarce. This study aims to analyze the financial profitability for olive mills of by-products composting, identify the main factors that determine this profitability, and conduct a sensitivity analysis regarding these factors. For this purpose, the investment and operating costs required for the composting activity have been assessed, determining that, under the current situation, the commercial margin of the activity is negative (−€3.64/t of compost). Without considering the sale price of olive pomace to the extractor industry (which represents an opportunity cost for other valorization alternatives, like composting), the commercial margin is estimated to be positive (+€9.52/t of compost). The sensitivity analysis has shown that fuel price, the sale price of the olive pomace to the extractor industry, and the manure price are the main limiting factors for the profitability of the composting valorization alternative. A detailed analysis of the effect of the distance to the pomace oil extraction industry on the cost of the compost produced was also carried out, showing that the commercial margin is positive for distances greater than 54 km

Willingness to accept for rewilding farmland in environmentally sensitive areas

Rewilding farmland represents a good policy option to restore and conserve the environment in environmentally sensitive areas. This paper is the first to analyze farmers’ preferences for rewilding schemes, focusing on partial and complete passive rewilding schemes and using a novel methodological application of the contingent valuation method and an extensive Mediterranean agricultural system as a case study. The results show that farmers would only be willing to participate in rewilding schemes at very high payment levels (€833 and €1187/ha/year on average for partial and complete rewilding schemes, respectively). High heterogeneity of preferences is also evidenced, especially related to farm characteristics (yield) and management (use of environmentally friendly practices), farmer characteristics (perceived succession probability and farm income dependence), attitudes, and opinions (with regard to the scheme’s objective). Significant policy implications can be drawn from the results, including the need for targeting in rewilding programs, the suitability of complementing them with rural economy diversification actions, and the usefulness of environmental awareness campaigns among farmers

Retos y oportunidades de la implantación de los bancos de agua en España

Con el fin de conseguir una buena gobernanza del agua, que trate de alcanzar un equilibrio entre los objetivos de eficiencia económica y sostenibilidad ambiental, durante las últimas décadas se ha potenciado el uso de instrumentos económicos para una mejor gestión de la demanda de los recursos hídricos, dada la dificultad de seguir aumentando la oferta de los mismos. En este contexto, este trabajo se centra en los bancos de agua como mecanismo de mercado que aporta la necesaria flexibilidad institucional en la asignación de los recursos hídricos entre los diferentes usuarios. La investigación realizada en este sentido ha permitido desarrollar una tipología de los bancos de agua que actualmente operan a nivel mundial en base a sus características operativas. Esta caracterización ha permitido igualmente realizar un análisis crítico de las experiencias de bancos de agua implementadas hasta la fecha, con el fin poder valorar el desempeño de este instrumento económico para la mejora de la gestión pública del agua. La investigación llevada a cabo revela que los bancos de agua son un instrumento útil para la gestión de los recursos hídricos, aportando sugerencias para la mejora de su implementación operativa en España mediante la correspondiente reforma de la Ley de Aguas.Ministerio de Economía y Competitividad (MINECO) AGL2013-48080-C2-1-RFondo Europeo de Desarrollo Regional (FEDER) AGL2013-48080-C2-1-

Unraveling determinants of inferred and stated attribute non-attendance: effects on farmers’ willingness to accept to join agri-environmental schemes

Attribute non-attendance (ANA) has received very little attention in the context of willingness to accept (WTA), although an increasing number of studies analyze the preferences of ecosystem service providers towards incentive-based schemes. We add to the understanding of ANA behavior by analyzing stated and inferred ANA in a choice experiment investigating farmers’ WTA for participating in agri-environmental schemes (AES) in southern Spain. We use mixed logit models, following Hess and Hensher (2010) for the inferred ANA approach. Evidence is found of ANA behavior for both stated and inferred approaches, with models accounting for ANA clearly outperforming those that do not account for it; however, we produce no conclusive results as to which ANA approach is best. WTA estimates are only moderately affected, which to some extent is consistent with the low level of non-attendance found for the monetary attribute. Stated and inferred approaches show very similar WTA estimates. Additionally, we investigate sources of observed heterogeneity related to ANA behavior by using a sequence of bivariate probit models for each attribute. Overall, our results hint at a positive relationship between ease of scheme adoption and non-attendance to attributes. However, further research is still needed in this field

Are multi-criteria decision making techniques useful for solving corporate finance problems? A bibliometric analysis

Corporate financial decision making processes (selection of investments and funding sources) are becoming increasingly complex because of the growing number of con icting criteria that need to be considered. The main aim of this paper is to perform a bibliometric analysis of the international research on the application of multi-criteria decision making (MCDM) techniques to corporate finance issues during the period 1980-2012. A total of 347 publications from the Scopus database have been compiled, classified and analysed. The results obtained confirm: a) an increase in the importance of MCDM in corporate finance; b) the relevance of MCDM techniques in capital budgeting processes (fixed assets investment) and in the assessment of firms' economic and financial performance; c) the techniques based on the multiple attribute utility theory (MAUT) are the most popular in complex decision making situations as they are very simple to implement