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Marginal cost estimation of agricultural output and ecosystem services

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  • Vígh, Enikő
  • Miskó, Krisztina
  • Fogarasi, József

Abstract

Agricultural ecosystems deliver food, fibre, pharmaceuticals, bioenergy and are fundamental to human wellbeing. In Hungary main measures targeting the sustainable use of agricultural land in New Hungary Rural Development Programme (NHRDP) are: Agri-Environment Payments and payments to Less Favoured Areas. Based on theoretical assumptions, the delivery of different ecosystem services (e.g. soil fertility, pest control) may be typical of one product–product connection, but farms can deliver multiple services which by themselves are produced in non-separable packages. In this study we employ a transformation function with multiple outputs and inputs, representing the maximum output producing possibility from a given input and with given conditions using generalised linear regression. Given the limited options to implement the overall policy coherence of ecosystem conservation, the presented work contributes to knowledge of decisionmakers, whose need to take into account the heterogeneity of farms and corresponding ecosystem services on farm territory.

Suggested Citation

  • Vígh, Enikő & Miskó, Krisztina & Fogarasi, József, 2019. "Marginal cost estimation of agricultural output and ecosystem services," 172nd EAAE Seminar, May 28-29, 2019, Brussels, Belgium 289716, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaa172:289716
    DOI: 10.22004/ag.econ.289716
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    Keywords

    Agricultural and Food Policy;

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