Differentiated Impacts of EU Rural Development Measures: A Finite Mixture Evaluation of Italian Olive Farms

This paper examines the relationship between participation in the EU Rural Development Program and the economic performance of Italian olive farms using a finite-mixture model with inverse-probability-weighted regression adjustment. Based on 2010–2022 FADN panel data, it estimates heterogeneous treatment effects while correcting for selection bias. Results suggest that RDP participation is associated with higher net income, by about EUR 280/ha on average. Two farm clusters emerge, also reflecting different typologies of rural development program measure packages: family-run farms in disadvantaged areas are often associated with agro-climatic environmental commitments and related packages and gain about €265/ha. By contrast, more profitable and labor-intensive farms are more frequently linked to less adopted measures and benefit only marginally. A Monte Carlo simulation assesses the estimator's performance under a controlled data-generating process. The study highlights the need to account for structural heterogeneity in policy evaluation and supports data-driven rural development strategies.