ESTIMATING THE IMPACT OF POLICIES UNDER SPATIAL INTERFERENCE. THE CASE OF CAP SUPPORT TO ORGANIC FARMING

Edoardo Baldoni and Roberto Esposti

No 475, Working Papers from Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali

Abstract: This paper deals with the identification and estimation of a policy impact taking spatial interference explicitly into account. Most literature on treatment-effect estimation excludes this spatial interference by assumption but in several policies spatial interference is very likely to occur as well-known economic forces make contiguity affect both treatment assignment and effect. The paper develops two alternative spatially explicit estimation approaches to take these economic forces into account. These approaches are applied to the support for the adoption of organic farming within the Common Agricultural Policy. The Italian 2008-2020 Farm Accountancy Data Network (FADN) sample is considered. Results suggest that spatial interference occurs and it is relevant in both treatment assignment and impact. Propensity Score Matching approaches seem more suitable to capture this interference.

Keywords: Spatial Interference; Treatment effect; Agro-Environmental Policy; Organic Farming. (search for similar items in EconPapers)
JEL-codes: C21 Q15 Q51 (search for similar items in EconPapers)
Pages: 48
Date: 2023-04
New Economics Papers: this item is included in nep-agr and nep-env
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