Abstract
The purpose of this paper is to measure positive and negative externalities which the farmland exert on inhabitants in Itami City, Hyogo Prefecture by the use of the contingent valuation method with payment cards.
I estimated the bid equations for the positive and negative externalities by using grouped data regression model, which was known as a more effective estimation method when dependent variable was grouped datum. Considering that bids are non-negative, I estimated simultaneously behavior equations for paying and accepting compensation. Moreover, 1 tested distributional assumptions of the error term such as heteroscedasticity to find more appropriate specification.
As a result, I found that WTP (willingness to pay) for the social benefit and WTA (willingness to accept compensation) for the social cost were 1691 yen and 895 yen a year on average, respectively. And WTP for the net benefit, which was the difference between them, was 796 yen. Also I concluded that this estimated monetary value might be increased in large by PR activities of the social benefit for inhabitants and the farmers'efforts to conserve the environment.
From the analysis of this paper it was clarified that the total monetary value of social net benefit of farmland in Itami City was about 50, 000, 000 yen, which was derived from multipling 796 yen by the number of nonagricultural households in Itami City. Finally, because this value was more than an annual expenditure for agriculture of the local government of Itami City, I concluded that the social benefit of farmland in Itami City was large significantly.
