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This paper identifies which diversified activities influence the price level of agritourism and how they do so. A hypothesis that contrasts two types of activity (facility based and local culture based) is examined. First, from a conceptual perspective, the authors note that agritourism based on local cultural resources can internalize positive externalities, which are uniquely nurtured local cultural resources, into income – unlike facility based activity that has no connection with local cultural resources. Second, the results of estimations from a price determinant ordered logit model demonstrate that owning a swimming pool is the most common and influential factor in enhancing the price level, while regional diversity is observed in local cultural resource based activities such as restaurants, World Heritage Sites and DOC wines. These findings indicate that hardware based evolution is more effective in the short term than evolution based on software. Nevertheless, this hardware based evolution of agritourism is founded implicitly on an assumption of continuously growing demand and sufficient financial capability for the fixed investment. When growth in demand becomes stagnant, facility installation can be a heavy burden on operators. Consequently, for the sustainable development of agritourism, it will be necessary to harness the locality so as to create a balance between facility based services and local culture based services.

Although farm visiting is gaining popularity as a type of experience-oriented tourism, the economic viability of this emerging service has not been fully established. To make it viable, it is not enough to approach educational tourism solely from a technical viewpoint, we also need to approach it from the aspect of the operator’s identity, a factor that has not been addressed fully in the arena of either rural tourism or tourism economics. Thus, by presenting a conceptual economic framework that explains the connection between a farmer’s identity and the level of diversified activity including tourism, this article has evaluated, based on a questionnaire survey of next-generation successors working on-farm at Educational Dairy Farms in Japan, the hypothesis that those farmers who have enlarged their identity will be able to successfully develop diversified activities. The results clarify factors that lead to enlarged identity, including formation of both a wider perspective and more extensive human networks from social learning opportunities, and female initiative within the activity. In this context, the issue of identity formation should be properly positioned in the field of innovation-oriented capability building of farm management.