A European Perspective
- New Horizons in Environmental Economics series
Edited by Ekin Birol and Phoebe Koundouri
Chapter 3: Using Mixed Logit Models to Derive Individual-Specific WTP Estimates for Landscape Improvements under Agri-environmental Schemes: Evidence from the Rural Environment Protection Scheme in Ireland
3. Using mixed logit models to derive individual-speciﬁc WTP estimates for landscape improvements under agri-environmental schemes: evidence from the Rural Environment Protection Scheme in Ireland Danny Campbell, W. George Hutchinson and Riccardo Scarpa INTRODUCTION After more than ﬁfty years of European Union (EU) agricultural policies designed to support farm incomes through farm commodity prices, there has been a signiﬁcant shift in emphasis. With an increased focus on areabased payments and payments for the supply of environmental goods, agrienvironmental schemes have become an important component within the Common Agricultural Policy (CAP), as also discussed in Chapters 4, 5 and 6 of this volume. Within this context, the Rural Environment Protection (REP) Scheme was introduced in the Republic of Ireland in 1994. Designed to pay farmers for carrying out their farming activities in an environmentally friendly manner, the Scheme is aimed at creating incentives for farmers to maintain and improve the broadly deﬁned rural environment and the rural landscape. By the end of 2004, over €1.5 billion had been paid to Irish farmers under the REP Scheme. Assessing whether the Scheme has oﬀered value for money requires an examination of both its costs and beneﬁts. While the ﬁnancial costs are readily available, calculating the beneﬁts is more problematic. Aside from the ﬁnancial beneﬁts farmers derive from participation, the REP Scheme oﬀers a range of beneﬁts to society (Gorman et al., 2001; Mannion et al., 2001). Some of these are the enhanced value of...
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