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Economic analysis of irrigation services. An application of the hedonic price method on the FADN data

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  • Eleonora Tauro,
  • Laura Mirra,
  • Simone Russo,
  • Grazia Valentino,
  • Donato Carone,
  • Giacomo Giannoccaro
Eleonora Tauro
Department of Soil, Plant and Food Science, University of Bari "Aldo Moro", Bari, Italy
Laura Mirra
Water Research Institute - National Research Council (IRSA-CNR), Bari, Italy
Simone Russo
Department of Soil, Plant and Food Science, University of Bari "Aldo Moro", Bari, Italy
Grazia Valentino
CREA Research Centre for Agricultural Policies and Bioeconomy, Bari, Italy
Donato Carone
CREA Research Centre for Agricultural Policies and Bioeconomy, Bari, Italy
Giacomo Giannoccaro
Department of Soil, Plant and Food Science, University of Bari "Aldo Moro", Bari, Italy
DOI: https://doi.org/10.36253/rea-14361

Published 2024-04-22

Keywords

  • water economics,
  • irrigation,
  • water service valuation,
  • Farm Accountancy Data Network,
  • olive grove

How to Cite

Tauro, E., Mirra, L., Russo, S., Valentino, G., Carone, D., & Giannoccaro, G. (2024). Economic analysis of irrigation services. An application of the hedonic price method on the FADN data. Italian Review of Agricultural Economics (REA). https://doi.org/10.36253/rea-14361

Copyright (c) 2024 Eleonora Tauro, Laura Mirra, Simone Russo, Grazia Valentino, Donato Carone, Giacomo Giannoccaro

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

Abstract

The economic valuation of water uses, as the Water Framework Directive (EC/60/2000) suggests, should support policymakers in water management. Aiming to assess the economic value of irrigation water services, a hedonic price analysis was conducted on the value of farmland. Specifically, we examined the differences between collective and self-supply irrigation services, with the hypothesis that each reflects different water supply qualities that are capitalized into land value. A homogeneous sample of olive farms in the Apulia region was analysed using data from the Farm Accountancy Data Network. The results confirm the hypothesis that different economic values are assigned to water services. A higher value of self-supply service with respect to collective ones might be associated with the greater security and reliability of the service provided. Finally, our analysis points out that the Farm Accountancy Data Network database can provide policymakers with a harmonized dataset for the economic evaluation of irrigation water. This can help them to develop evidence-based policies, as required in the Water Framework Directive.

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