Latent relationships between environmental impacts of cultivation practices and land market: Evidences from a spatial quantile regression analysis in Italy

Abstract

Several economic approaches can be carried out for managing the environmental impacts in agriculture, i.e. property and bargaining rights, economic incentives, ecological fees, etc. These approaches can be mainly applied to the cultivation phase or to the markets of the agricultural commodities. However, a further ambit in which the regulatory systems could be useful to trigger sustainable cultivation practices is the farmland market. Hence, this study contributes to the setting of market mechanisms based on incentives or fees related to the environmental impacts of farming practices for reducing the pressures of the production processes on the environmental components.The study, through a hedonic pricing method based on a spatial quantile regression and integrated by an environmental analysis, highlights different trends of land value determinants along the quantiles of the selling prices as the intensity of the cultivation system varies. The results show that the most important value determinants of the vineyards cultivated through the semi-extensive production system are related to the quality of grapes. Conversely, in presence of the intensive production system, the most important value determinants are related to the high yields, which also generate high greenhouse gas emissions, in contrast with the “polluter pays” principle.The results allow the assessment of the implicit marginal prices concerning the impact of the environmental indicator on land value per cultivation system, so as to favour the setting of regulatory monetary strategies able to foster farmers towards cleaner agricultural practices.