Agritourism attractions are a commonly chosen alternative in farm diversification. Some attractions are based on active farms, while others are based on rural ambience. We model and estimate the agritourism attraction market as a differentiated-goods market based on Israeli market data and simulate different scenarios. We show that total welfare increases when attractions are based on rural ambience rather than on active farms. We also show that an indirect support scheme has a stronger impact on total welfare than a direct scheme.
Bibliographical noteFunding Information:
This study has received funding from the Chief Scientist of the Israel Ministry of Agriculture and Rural Development.
© Oxford University Press and Foundation for the European Review of Agricultural Economics 2018.
- agritourism attractions
- constant expenditure model
- differentiated goods
- oligopoly mark-up