Hidden action, risk aversion and variable fines in agri-environmental schemes

Adam Ozanne and Ben White

Australian Journal of Agricultural and Resource Economics, 2008, vol. 52, issue 2, 10

Abstract: This note analyses the design of agri-environmental schemes for risk-averse producers whose input usage is only observable by costly monitoring. The scheme penalises producers in proportion to input use in excess of a quota. A striking result is that if the scheme is designed in such a way that producers always comply with the quota, risk aversion is not relevant in determining the level of input use.

Keywords: Environmental Economics and Policy; Risk and Uncertainty (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (14)

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Journal Article: Hidden action, risk aversion and variable fines in agri-environmental schemes * (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aareaj:118539

DOI: 10.22004/ag.econ.118539

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