Spatially Varying Impacts of Farmers Markets on Agricultural Land Use

Abstract

Forming part of the worldwide locavore movement, farmers markets have attracted a considerable number of citizens in recent years. While previous studies have extensively explored consumer preferences for this form of direct marketing, few have paid close attention to their effect on agricultural producers’ behaviour. Using a dataset from Chiba Prefecture in Japan’s eastern region where the locavore movement is highly active, we investigate changes to cropping patterns, particularly from grain production to vegetable production, when new farmers markets are established in producers’ neighbourhoods. At the same time, we attempt to identify the degree of spatial diversity of such land use shifts, based on the conjecture that the magnitude of the impact depends greatly on the area’s biophysical and socioeconomic conditions. To achieve these dual goals, we introduce a novel combination of geographically weighted regression with difference-in-differences analysis so that the coefficient of interest, or the treatment effect, can be estimated individually for each observation within the sample. The results show that at the sample median, the opening of a new farmers market increases the proportion of vegetable farms in its neighbourhood by 0.8 percentage points, although this effect can be as large as 5.2 percentage points in certain areas within Chiba Prefecture. The ability to geographically differentiate high-impact areas from low-impact areas could contribute to efficient policy design, and hence, reduction in public expenditure.

Keywords: Farmers market, land use, program evaluation, geographically weighted regressions, difference-in-differences, GIS

JEL Classification: Q12, Q15, R32, R58