Public goods production and value creation in wineries: a structural equation modelling

Abstract

Purpose

The aim of the study is to analyse the value creation processes in multifunctional wineries. Specifically, the paper poses the following research questions: can the creation of public goods (i.e. multifunctionality) open up new paths of value creation for wineries? And if so, can multifunctionality be only compensated through policy instruments? Or, is there a form of market compensation?

Design/methodology/approach

An empirical analysis was carried out on selected wineries that sell directly. The study implemented the “value portfolio” model that identifies specific variables, both internal and external to the farm, which contribute to the value creation. The methodology adopted is a structural equation modeling (SEM) approach that offers a theoretical basis for developing an understanding of the relationships between group of variables.

Findings

The empirical analysis confirms the assumptions developed. Indeed, the localized public goods generated by multifunctional farms can benefit from compensation on the market through the direct sale of products and services.

Originality/value

The study’s findings are quite innovative in the field of agricultural economics and open the way for interesting policy implications.

Citation

Marotta, G. and Nazzaro, C. (2020), "Public goods production and value creation in wineries: a structural equation modelling", British Food Journal, Vol. 122 No. 5, pp. 1705-1724. https://doi.org/10.1108/BFJ-08-2019-0656