Using choice experiment to estimate the magnitude of transaction costs

There are at least two ways to enhance contract adoption: whether to adapt the payment or to change the governance structure, i.e. contract attribute levels. This paper shows the role of contract attribute levels on the decision to adopt a contract, ceteris paribus. It thus tries to evaluate and analyse the impact of contract attribute level on transaction costs. The choice experiment method appears to be relevant to yield euro estimates of transaction costs. This method is applied to analyse governance structure preferences of 171 farmers to which agro-environmental contracts with different attribute levels have been proposed. Results show contract attribute levels have a significant impact on transaction costs and mainly on maladaptation ones. A typology of sources of these maladaptation costs is also provided