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Abstract

Changes in EU agricultural policies towards an increased focus on rural development issues raise questions regarding the economic impact of local and regional spatial competition. Farmers are typically price takers in the traditional markets for the major agricultural products. This is, however, not necessarily the case for “new enterprises” active in local and regional markets. This paper examines local/regional spatial competition for farm tourism. A spatial econometrics framework is applied to a hedonic pricing model. It is shown that spatial dependence affects the pricing of both Self-catering and Bed & Breakfast. However, the results indicate that local/regional competition may have a positive effect on the former but a negative effect on the latter. The findings illustrate the potential importance of local competition for rural developments studies.

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