Forming part of the locavore movement, farmers markets are attracting a considerable number of citizens worldwide in recent years. While previous studies have extensively explored consumer preferences for this form of direct marketing, few have paid a close attention to their effect on agricultural producers' behaviours. Using a dataset from Chiba Prefecture in Japan's eastern region where the locavore movement is highly active, we investigate how producers alter their cropping patterns, particularly from grain production to vegetable production, when a new farmers market is established in their neighbourhood. At the same time, we also attempt to identify the degree of spatial diversity of such an impact, under a conjecture that the magnitude of the impact varies greatly depending on the area's biophysical and socioeconomic conditions. To achieve these dual goals, we propose a novel combination of the geographically weighted regression with the difference-indifferences analysis, so that the coefficient of interest, the treatment effect, is estimated individually for each observation in the sample. The results show that at the sample median new opening of a farmers market increases the proportion of vegetable farms in its neighbourhood by 0.8 percentage points, although this effect can be as large as 5.2 percentage points in certain areas within the prefecture. The ability to geographically differentiate high-impact areas from low-impact areas can potentially contribute to efficient policy designs, and hence the reduction in public expenditures. 3 Spatially Varying Impacts of Farmers Markets on Agricultural Land Use Considered by many as a means to lead a healthy and environmentally sustainable lifestyle, the locavore movement is attracting citizens worldwide in recent years. Various channels of alternative food networks, defined as direct or nearly direct transactions between agricultural producers and consumers, are increasing both their market share and their standing in the society (Renting, Marsden and Banks 2003). Local food restaurants, roadside food stands, mail order services offered by farms, and community supported agriculture are all examples of such a movement. Among all alternative marketing channels, arguably one of the most important is farmers markets, where urban and rural consumers alike can purchase fresh agricultural commodities, most commonly vegetables, fruits and dairy products, straight off farms. According to a USDA survey, an average vendor at a farmers market in the United States sells approximately $12,000 worth of their products annually (Payne 2002), while another study estimates that 25% of vendors use farmers markets as a sole outlet for their sales (USDA 2006). The benefit trickles down to wider communities as well:
