ESTIMATING WILLINGNESS TO PAY FOR DIGESTATE: EVIDENCE FROM AN ECONOMIC EXPERIMENT FROM SICILIAN FARMERS

In this study, we estimated the willingness to pay of Sicilian farmers to buy the digestate which is a by-product of anaerobic digestion process of biomass. We argued that variation of the degree of information about digestate alters farmers’ willingness to pay for it. In particular, through a second price experimental auction, we evaluated whether waiting for additional future information on digestate would influence farmers’ willingness to pay. Our results show the existence of a positive farmers’ willingness to pay for digestate and a delay effect value arising from the option value of being able to wait and learn more about the value of the digestate. This implies the necessity for policy makers to provide farmers with an appropriate level of information about the digestate’s attributes.