1 Section for Environment and Natural Resources, Department of Food and Resource Economics, Faculty of Science, Københavns Universitet2 Economics, politics and operational planning, Forest & Landscape Denmark, Faculty of Life Sciences, Københavns Universitet3 University of Queensland4 Economics, politics and operational planning, Forest & Landscape Denmark, Faculty of Life Sciences, Københavns Universitet5 Section for Environment and Natural Resources, Department of Food and Resource Economics, Faculty of Science, Københavns Universitet
The supply of ecosystem goods and services is spatially heterogeneous and the provision of such goods and services is also influenced by landowners' willingness to provide. This is particularly the case in countries such as Denmark where many properties are privately owned. However, little attention has previously been given to the relationship between farmers' willingness to provide a good or service and the spatial heterogeneity associated with their demand. In this study farmers' willingness to participate in afforestation contracts are investigated using a choice experiment of various contracts with the purpose to provide: groundwater protection, biodiversity conservation or recreation. We employ a random parameter logit model to analyse the relationship between farmers' preferences for afforestation purposes and the spatial variables; groundwater interests, species richness, human population density, forest cover and hunting. The results show that increasing human population density significantly increases farmers' required compensation with respect to recreational activities. Furthermore, there is a significant effect of hunting which decreases compensation required by the farmers to enter an afforestation project. The share of groundwater and forest cover does not significantly influence preferences. We conclude that spatial variations should be considered when designing conservation policies.