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Do farmers value the environment? Evidence from a conservation reserve program auction

Tomislav Vukina (), Xiaoyong Zheng (), Michele Marra and Armando Levy

International Journal of Industrial Organization, 2008, vol. 26, issue 6, 1323-1332

Abstract: The paper uses data from one Conservation Reserve Program (CRP) auction to elicit farmers' attitudes toward the environment by analyzing their bids. The CRP pays farmers to remove chosen plots of land from agricultural production and put them to a conservation use. An interesting aspect of this auction is that winners are determined by a combination of low bids and environmental scores of individual plots. Using decision theoretic approach to model this auction we show that farmers condition their bids on the strength of their environmental scores and that they value environmental benefits, especially those that increase future soil productivity of their land.

Keywords: Government; auctions; Decision; theory; Environmental; benefits; evaluation (search for similar items in EconPapers)
Date: 2008
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Working Paper: Do Farmers Value The Environment? Evidence from the Conservation Reserve Program Auctions (2006) Downloads
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Handle: RePEc:eee:indorg:v:26:y:2008:i:6:p:1323-1332