The effect of decoupling on marginal agricultural systems: Implications for farm incomes,land use and upland ecology

In many parts of Europe, decades of production subsidies led to the steady intensification of agriculture in marginal areas. The recent decoupling of subsidies from production decisions means that the future of farming in these areas is uncertain. For example, in the uplands of the United Kingdom, an area important both for biodiversity conservation and ecosystem service provision, hill farmers steadily increased stocking densities in response to headage payments but must now reconfigure farm businesses to account for the shift to the Single Farm Payment scheme. We examined hill farming in the Peak District National Park as a case study into the future of marginal agriculture after decoupling. We surveyed 44 farm businesses and from this identified six representative farm types based on enterprise mix and land holdings. We developed linear programming models of production decisions for each farm type to examine the impacts of policy changes, comparing the effects of decoupling with and without agri-environment and hill farm support, and evaluating the effects of removal of the Single Farm Payment. The main effects of decoupling are to reduce stocking rates, and to change the mix of livestock activities. Agri-environmental schemes mediate the income losses from decoupling, and farmers are predicted to maximise take up of new Environmental Stewardship programmes, which have both positive and negative feedback effects on livestock numbers. Finally, removal of the Single Farm Payment leads to negative net farm incomes, and some land abandonment. These changes have important implications for ongoing debates about how ecological service flows can be maintained from upland areas, and how marginal upland farming communities can be sustained.     

Do Local Landscape Patterns Affect the Demand for Landscape Amenities Protection?

Agricultural support is increasingly flowing into the maintenance and improvement of landscape quality. While variations in the demand for landscape protection have been successfully attributed to variations in socio‐economic characteristics, the effect of the local landscape setting as a potential determinant of environmental preferences has received less attention. A framework is formulated that describes public support for regional landscape protection as a function of socio‐economic variables and land use patterns. Models are then estimated using detailed local land use statistics and voting records from a referendum on increasing public funding for local landscape amenities protection in the Swiss canton of Zurich. The land use variables represent proportions of open landscape and landscape features that are viewed as particularly valuable for aesthetic and other reasons. Cross‐sectional estimation results suggest that attitudes towards public landscape protection are indeed strongly associated with the local landscape. Approval for protection programmes increased with local scarcity of open space and with the presence of high‐amenity landscape features. Comparison with referendum outcomes on a national‐level environmental issue suggests that the positive association with high‐amenity landscape features may be partly attributable to individuals' self‐selection of residency.     

South–South FDI: is it really different?

We compare the performance of Northern and Southern multinationals in Sub-Saharan Africa, and contrast it with local firms in the host country. Employing unique firm level data for 19 Sub-Saharan African countries, we show that firms receiving FDI outperform domestic ones, while the origin of the foreign investor is of minor importance. We use three different definitions of “South” to compare Northern and Southern FDI. Overall, we do not find strong differences in terms of firm productivity growth between Northern and Southern FDI, irrespective of how the latter is defined. However, we find that employment growth is generally higher for firms receiving FDI from other African investors as compared to Northern FDI, and they also receive more technology transfer from their parent company abroad.     

Social Norms,Morals and Self-interest as Determinants of Pro-environment Behaviours: The Case of Household Recycling

This paper considers the role which selfish, moral and social incentives and pressures play in explaining the extent to which stated choices over pro-environment behaviours vary across individuals. The empirical context is choices over household waste contracts and recycling actions in Poland. A theoretical model is used to show how cost-based motives and the desire for a positive self and social image combine to determine the utility from alternative choices of recycling behaviour. We then describe a discrete choice experiment designed to empirically investigate the effects such drivers have on stated choices. A hybrid logit model is used to link statements over attitudes to recycling to choices, dealing with a potential endogeneity problem caused by the joint effects of un-observables on attitudes and choices. We find that a substantial share of our respondents prefer to sort their waste at home rather than in a central sorting facility. This preference is associated with a moral/intrinsic motivation, involving a belief that sorting at home is more thorough than central sorting.     

The Effects of Electricity Costs on Firm Re-location Decisions: Insights for the Pollution Havens Hypothesis?

Electricity costs are partly driven by environmental policy choices. In this paper, the effects of variations in electricity costs—as measured by end-user electricity prices–on firm relocation decisions are investigated. Using a discrete choice model and a data base that has not previously been exploited to study this problem, we investigate the effects of variations in electricity costs on the intensive and extensive re-location decisions of European firms. We find that electricity costs play a significant role in determining relocation destinations. This effect is asymmetric between firms moving into and out of a country, and between high and low energy intensity sectors. The findings of the paper have implications for the Pollution Havens Hypothesis, since they show the extent to which the effects of climate policy on domestic electricity costs can be expected to impact on firm relocation decisions both into and out of a country.     

Valuing changes in forest biodiversity

The paper attempts to improve current understanding of the economic value of biodiversity. Instead of the prevailing approach of using only one indicator of biodiversity (typically, species richness) we provide evidence that it is possible to value changes in a number of attributes which describe complex characteristics of biodiversity, based on ecological knowledge. The attributes used include structural, species and functional diversity. The empirical application is a choice experiment study conducted in the Białowieża Forest, Poland: our study is therefore also one of the first to cast light on the value of biodiversity protection in Eastern Europe. Interestingly, respondents valued passive protection regimes resulting in preservation of natural ecological processes. In addition, the respondents seemed to be concerned with the means, and not only the results of protection programmes.     

Using Labels to Investigate Scope Effects in Stated Preference Methods

Insufficient sensitivity to scope (variations in the scale of the environmental good on offer) remains a major criticism of stated preference methods, and many studies fail a scope test of some sort. Across a range of existing explanations for insensitivity to scope (commodity mis-specification, embedding, warm glows) there seems to exist no clear conclusion on how to deal with the problem. This paper provides an alternative explanation for insufficient sensitivity to scope, based on re-definition of the determinants of value for environmental goods within an attributes-based choice model. In the proposed framework respondents’ Willingness To Pay need depend not only on physical characteristics of a good, but may also depend on the ‘label’ under which the environmental good is ‘sold’ in the hypothetical market. To investigate this problem, a Choice Experiment study of biodiversity was conducted. We find that controlling for the effects of a label—in this case, national park designation—leads to significant increase in the scope sensitivity of welfare measures.     

Creating Backward Linkages from Multinationals: Is there a Role for Financial Incentives?

We investigate whether government subsidies encourage foreign multinationals to create linkages with domestic suppliers. To this end we use a unique panel dataset of foreign multinationals located in Ireland for which we have exhaustive information on grant receipt. Our results indicate that while European and US foreign plants develop backward linkages independently of grant receipt, multinationals from other parts of the world respond positively to government support. Our results hold even when controlling for the possible endogeneity of grants and the boundedness of the linkage variable. We conclude that governments should not apply a “one‐size‐fits‐all” approach to incentivizing foreign multinationals.     

Adjusting for Cultural Differences in International Benefit Transfer

Values for non-market goods can be expected to be sensitive to variations in the cultural contexts of beneficiaries. However, little progress has been made to date in adapting benefit transfer (BT) procedures for cultural variations. Using information from a study that ranked 62 societies with respect to nine attributes of their cultures, we develop an index that is then used to re-weight multiple coastal ecosystem service value estimates. We examine whether these culturally-adjusted BT estimates are statistically different than simply transferring the income-adjusted mean transfer estimates for each coastal ecosystem service from international study sites to the policy site. We find that once differences in income levels have been accounted for, the differences in cultural dimensions between study and policy sites actually have little impact on the magnitude of our transfer estimates. This is not a surprising result given that the majority of the study site estimates are derived from countries that share many ethnic, linguistic and other cultural similarities to the policy site. However, benefit adjustments based on cultural factors could have a much higher impacts in settings different to that investigated here.     

Go climb a mountain: an application of recreation demand modelling to rock climbing in Scotland

In this paper, we apply random utility modelling techniques to rock‐climbing in Scotland. Attributes relevant to choices over rock‐climbing sites were identified from focus groups with climbers, along with a categorisation of principal climbing areas. A survey of climbers yielded 267 responses, which were then used as the basis for modelling. We compare a standard multi‐nominal logit model with a random parameters approach, and look at seasonal differences in behaviour, and at the implications of different treatments of travel time. The random utility models showed that most of the attributes selected were significant determinants of choice. Welfare estimates of changes in site attributes are presented, which are relevant to policy choices currently facing land managers.