The non-market benefits of rural service provision

The provision of services in rural areas is constrained by a number of issues arising from the remoteness of such areas and the relative sparsity of rural populations. These factors combine to increase the cost of supply and reduce the demand for services, which consequently threatens the viability of service provision whether by the public or private sectors. A possible to solution to these issues lies in the co-location of rural services, which in general means that two or more distinct services are located within the same premises thus reducing the delivery costs associated with one or more of these services. Beyond the simple economics of service provision lies the existence of nonmarket elements of services in terms of benefits to local communities of service provision that might arise from the social elements of local provided services such as community cohesion. This paper applies non-market valuation to quantify these benefits in three case studies across Scotland. The results indicate that relative degree of these benefits can be related to the remoteness of rural communities in that more remote communities particularly value the community aspects of services whereas less remote communities are more resistant to increased distances to access services. More generally, the results provide evidence on the inherent trade-offs between factors such as opening hours, levels of service and distance that can be used in determining the optimal configuration of service provision.