Specific Objectives of the Project:

1. Estimate the short- and long-term impacts of agritourism on farms’ revenue, use of farmland, agricultural production, and agriculturists’ welfare.
2. Assess the differential impacts between small and large farms

Project Report/Summary of Results:

This initiative aimed to evaluate the short- and long-term impacts of agritourism on farms' revenue, use of farmland, agricultural production, and agriculturists' welfare in California. We managed to collect daily data on Airbnb rural listings and transaction records in California between 2015 and 2022. We also successfully developed metrics to assess agritourism development, incorporating the number of farm stays openings and occupancies on Airbnb near primary cities such as Los Angeles, San Francisco, and San Diego. In our attempt to establish causality, we employed non-farm stays as an instrumental variable for agritourism operation. We then applied a 2SLS regression model to examine the effects of agritourism development on agricultural outcomes.

Our analysis successfully assessed the short- and long-term impacts of agritourism on California agriculture, identifying key trade-offs between short-term economic benefits and long-term agricultural productivity. The primary findings include:

1. Over the short run, agritourism was found to have positive effects on farms' economic performance and sustainability, with small farms benefiting more than large farms.
2. In the long-term, agritourism led to the diversion of farmland resources away from agricultural production, with more significant impacts on small farms. The results suggested a trade-off between short-term economic benefits and long-term agricultural productivity due to agritourism activities.
3. The spatial distribution of agritourism activities varied across California, with certain regions experiencing more significant impacts on agricultural production and land use.

Our findings have substantial policy implications, providing insights into the efficient allocation and use of farm resources, and aiding in the formulation of specific strategies for small farms. Policymakers are urged to consider the trade-offs between immediate economic benefits and long-term agricultural productivity when crafting policies to support agritourism. Furthermore, our findings can guide the development of targeted strategies for small farms to balance agritourism activities and agricultural production.

In conclusion, our research offers valuable insights for cost-benefit analysis, allowing policymakers to compare the net benefits of agritourism with alternative strategies such as agricultural diversification and off-farm works.