Income Diversification Strategies of Italian Peri-Urban Farms: A Structural Equation Modeling Approach

Abstract

On-farm diversification in non-agricultural activities has been increasingly recognized as a rewarding farm strategy through which farmers produce on-farm non-agricultural goods and services. The main objective of this paper is to explore to what extent the condition of peri-urbanity affects farm income diversification in Italy by looking at the push and pull factors that allow peri-urban farmers to re-organize their business by developing diversification strategies that are tightly connected to the demand of goods and services coming from the urban society. A structural equation modeling (SEM) statistical technique has been applied to estimate direct and indirect causal relationships among the multiple variables involved. The SEM analytical approach allowed us to untie the complexity of the push and pull factors connections and to highlight the most significant ones. The strengths of the structural paths provide evidence on the key diversification strategies adopted by peri-urban farms.