FARM HETEROGENEITY IN WILDLIFE PRODUCTION

The paper discusses the appropriate functional form and estimation technique for a wildlife production function on the farm level. A random effect model was developed to capture the relationship between wildlife output, management practices, natural conditions and non-observed factors that cause a farm specific management bias. Two wildlife measures were compared: species richness and a wildlife yardstick that enables different species to be weighed on their ecological value. The results show that the farm specific factor has a significant impact on the production of wildlife both in terms of species numbers and in terms of ecological values. Parameter estimates that were similar for the species richness specification were found to vary with the yardstick specification, which indicates the added value of the wildlife yardstick. The results have implications for efficient payment schemes for wildlife production.