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The Department of Environmental Economics and Management

The Robert H. Smith Faculty
of Agriculture, Food and Environment
The Hebrew University of Jerusalem

PO Box 12, Rehovot 76100
Fax: 08-9466267

Department Head:
Prof. Ayal Kimhi, Tel: 08-9489376

Head of the teaching program:
Prof.Iddo Kan, Tel: 08-9489233

Miri Arazi, Tel: 08-9489230


Hatan, S. ; Fleischer, A. ; Tchetchik, A. Economic valuation of cultural ecosystem services: The case of landscape aesthetics in the agritourism market. 2021, 184, 107005. Publisher's VersionAbstract
Natural and agricultural landscapes provide a wide range of ecosystem services, among which are aesthetic landscapes. As these services have no direct market value, land use decision makers often ignore them in favor of urban sprawl, resulting in suboptimal resource allocation. Here, we suggest a novel method to evaluate the aesthetic landscape services of natural and agricultural ecosystems using the case of the agritourism market in Israel. We model the agritourism market as an oligopolistic market with differentiated products and formulate an equilibrium model with structural, double nested logit demand and pricing equations. The structural equations are expressed as a function of the attributes of the agritourism firm, among which are the components of landscape view. We use aggregate market data and GIS data to estimate the structural model. In the case of urban sprawl, the welfare loss is estimated at US$29,000–53,000 per km2, depending on the type of ecosystem that is forgone, whereas in agricultural sprawl over natural areas, the welfare loss is estimated at US$38,000 per km2. This welfare loss can be considered the economic value of landscape aesthetics services to the agritourism market. These findings illustrate the potential of using this valuation method for other ecosystems in other markets.
Ert, E. ; Fleischer, A. What do Airbnb hosts reveal by posting photographs online and how does it affect their perceived trustworthiness?. Psychology & Marketing 2020. Publisher's VersionAbstract
Abstract The use of sellers' personal photographs online is ubiquitous in sharing economy platforms such as Airbnb. This paper addresses two questions. First, what type of personal photos do hosts choose to post on Airbnb? Second, which of the characteristics of their photos affects their perceived trustworthiness? We answer these questions by building a structural equation model of the relation between the characteristics of the photos and the perceived trustworthiness of the hosts. The antecedents of trust in this model were defined based on insights from psychology regarding first impressions. We found that the hosts' visual characteristics (e.g., gender) as revealed in their online photographs affect their perceived trustworthiness both directly and indirectly via attractiveness. We also found that image characteristics, which are not related directly to the traits of the host in the picture (e.g., photograph quality), play a significant role in trust inference. Interestingly, the hosts' choices of their personal photos suggest that they may not be aware of these effects.
Ert, E. ; Fleischer, A. The evolution of trust in Airbnb: A case of home rental. Annals of Tourism Research 2019, 75, 279 - 287. Publisher's VersionAbstract
Airbnb, a leader of P2P accommodation markets, has acknowledged that “trust is what makes Airbnb work” and has implemented several trust indicators over the years: reputation system, impression formation, and certification. We evaluate the changes in these indicators over time: 1. the modification of the reputation system, 2. the removal of hosts’ photos from the main search screen, and 3. the introduction of the Superhost program. We find that the change of the rating system was associated with a small, yet significant, reduction in ratings, that the removal of the hosts’ photos might have eliminated the price premium of trustworthy images, and that Superhost certification involves a price premium, but does not seem to compensate for established reputation. This article also launches the Annals of Tourism Research Curated Collection on Peer-to-peer accommodation networks, a special selection of research in this field.
Talev, E. ; Bar-Nahum, Z. ; Fleischer, A. ; Tchetchik, A. Is agriculture important to agritourism? The agritourism attraction market in Israel. European Review of Agricultural Economicserae 2018, 45, 273 - 296. Publisher's VersionAbstract
Agritourism attractions are a commonly chosen alternative in farm diversification. Some attractions are based on active farms, while others are based on rural ambience. We model and estimate the agritourism attraction market as a differentiated-goods market based on Israeli market data and simulate different scenarios. We show that total welfare increases when attractions are based on rural ambience rather than on active farms. We also show that an indirect support scheme has a stronger impact on total welfare than a direct scheme.
Fleischer, A. ; Felsenstein, D. ; Lichter, M. A Spatially Accurate Method for Evaluating Distributional Effects of Ecosystem Services. Ecological Economics 2018, 145, 451 - 460. Publisher's Version
Fleischer, A. "QUANTITY AND QUALITY ISSUES IN DEMAND FOR TOURISM.". In Management Science in Hospitality and Tourism: Theory, Practice, and Applications; Management Science in Hospitality and Tourism: Theory, Practice, and Applications; 2016; pp. 125 - 146. Publisher's Version
Ert, E. ; Fleischer, A. ; Magen, N. Trust and reputation in the sharing economy: The role of personal photos in Airbnb. Tourism Management 2016, 55, 62-73.
Ert, E. ; Fleischer, A. Mere Position Effect in Booking Hotels Online. Journal of Travel Research 2016, 55, 311-321. Publisher's VersionAbstract
When travelers book hotels online, they are typically provided with a list of relevant hotels. Although presenting hotels on the screen in a list format seems appropriate for organizing the information, it creates a new (spurious) attribute for them: their position on the list. We tested experimentally whether the hotel’s position on the list affects its likelihood of being selected. Results revealed a nonlinear effect of hotel position on the list on choice: hotels that were listed at the top and bottom of the list were more likely to be chosen than those listed in the middle. This study suggests that even trivial web design choices, such as the choice of presenting data in lists, might result in nontrivial consequences on the behavior of prospective customers.