Abstract

This article uses random utility theory to analyse the economic and environmental trade‐offs at farm level in a Romanian rural area confronting water pollution on the basis of survey data. To underline the impact of socio‐economic variables in the decision‐making process at farm level as regards environmental choices, a binary logit model is estimated that includes socio‐economic variables in addition to the attributes in the choice set. The study shows that heterogeneity in tastes is partially captured by the inclusion of socio‐economic variables such as age, education, access to agri‐environmental information, number of children, land ownership and investment behaviour.

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