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Economic valuation of cultural ecosystem services: The case of landscape aesthetics in the agritourism market

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  • Hatan, Shachar
  • Fleischer, Aliza
  • Tchetchik, Anat

Abstract

Natural and agricultural landscapes provide a wide range of ecosystem services, among which are aesthetic landscapes. As these services have no direct market value, land use decision makers often ignore them in favor of urban sprawl, resulting in suboptimal resource allocation. Here, we suggest a novel method to evaluate the aesthetic landscape services of natural and agricultural ecosystems using the case of the agritourism market in Israel. We model the agritourism market as an oligopolistic market with differentiated products and formulate an equilibrium model with structural, double nested logit demand and pricing equations. The structural equations are expressed as a function of the attributes of the agritourism firm, among which are the components of landscape view. We use aggregate market data and GIS data to estimate the structural model. In the case of urban sprawl, the welfare loss is estimated at US$29,000–53,000 per km2, depending on the type of ecosystem that is forgone, whereas in agricultural sprawl over natural areas, the welfare loss is estimated at US$38,000 per km2. This welfare loss can be considered the economic value of landscape aesthetics services to the agritourism market. These findings illustrate the potential of using this valuation method for other ecosystems in other markets.

Suggested Citation

  • Hatan, Shachar & Fleischer, Aliza & Tchetchik, Anat, 2021. "Economic valuation of cultural ecosystem services: The case of landscape aesthetics in the agritourism market," Ecological Economics, Elsevier, vol. 184(C).
    • Handle: RePEc:eee:ecolec:v:184:y:2021:i:c:s092180092100063x
    DOI: 10.1016/j.ecolecon.2021.107005
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    References listed on IDEAS

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    Cited by:

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    2. Peng Wang & Nan Li & Yating He & Youjun He, 2022. "Evaluation of Cultural Ecosystem Service Functions in National Parks from the Perspective of Benefits of Community Residents," Land, MDPI, vol. 11(9), pages 1-26, September.
    3. Fatima Lambarraa-Lehnhardt & Rico Ihle & Hajar Elyoubi, 2021. "How Successful Is Origin Labeling in a Developing Country Context? Moroccan Consumers’ Preferences toward Local Products," Sustainability, MDPI, vol. 13(15), pages 1-17, July.
    4. Zhen, Huayang & Qiao, Yuhui & Zhao, Haijun & Ju, Xuehai & Zanoli, Raffaele & Waqas, Muhammad Ahmed & Lun, Fei & Knudsen, Marie Trydeman, 2022. "Developing a conceptual model to quantify eco-compensation based on environmental and economic cost-benefit analysis for promoting the ecologically intensified agriculture," Ecosystem Services, Elsevier, vol. 56(C).

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