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Lefebvre, Marianne
, Midler, Estelle and Bontems, Philippe
(2020)
Adoption of environmentally-friendly agricultural practices with background risk: experimental evidence.
TSE Working Paper, n. 20-1079, Toulouse
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Abstract
Farmers choose to avoid some risks by not engaging into practices with uncertain profits. Yet, they still face background risk beyond their control, such as climate change. The impact of background risk on decisions to adopt risky environment-friendly agricultural practices is analysed through a theoretical model and a public good experiment. We find that background risk discourages adoption,
despite the fact that it affects both environmentally-friendly and conventionally farmed land equally.
An incentive payment increases adoption but is significantly less efficient in the presence of both foreground and background risks. Results shed light on potential synergies between greening the CAP and supporting risk management.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | March 2020 |
| Place of Publication: | Toulouse |
| Uncontrolled Keywords: | Common Agricultural Policy, Agri-environmental measures, Background risk, Lab, experiment, Public good game |
| JEL Classification: | C93 - Field Experiments D81 - Criteria for Decision-Making under Risk and Uncertainty Q12 - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets Q18 - Agricultural Policy; Food Policy |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse 1 Capitole |
| Site: | UT1 |
| Date Deposited: | 25 Mar 2020 08:40 |
| Last Modified: | 27 Oct 2021 13:38 |
| OAI Identifier: | oai:tse-fr.eu:124137 |
| URI: | https://publications.ut-capitole.fr/id/eprint/34207 |
