| It is often assumed that the agricultural sector produces public goods or positive externalities that benefit the domestic consumers, in addition to its production of private goods. Efficient agricultural support is consequently directed towards resolving market failures caused by the existence of these public goods or externalities. We illustrate how this can be achieved in a Computable General Equilibrium model for one multifunctional aspect of agricultural production, namely the production of cultural landscape. Using a public good modeling framework as point of departure, we develop supply- and willingness to pay functions for cultural landscape. Governmental agricultural support is adjusted to achieve efficient supply of the public good. As an... |
