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Farmers Follow the Herd: A Theoretical Model on Social Norms and Payments for Environmental Services

Philippe Coent (), Raphaële Préget () and Sophie Thoyer ()
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Philippe Coent: Univ. Montpellier
Raphaële Préget: INRAE, CEE-M, Univ. Montpellier, CNRS, INRAE, Institut Agro
Sophie Thoyer: INRAE, CEE-M, Univ. Montpellier, CNRS, INRAE, Institut Agro

Environmental & Resource Economics, 2021, vol. 78, issue 2, No 4, 287-306

Abstract: Abstract The economic literature on Payments for Environmental Services (PES) has studied extensively the behavioural factors that prevent farmers from signing PES contracts, even when the payments exceed the expected opportunity costs. This article provides a theoretical model of the role played by the interplay of descriptive and injunctive social norms in farmers’ decisions. When they choose to contribute voluntarily to an environmental public good, farmers may be driven by descriptive norms akin to conformity (do as the majority of their peers) as well as by injunctive norms (in line with what society expects them to do), which are the equivalent of a social injunction to act in favour of the environment. The interactions between these two social norms can yield multiple equilibria, depending on the relative weight of the descriptive norm (sensitivity to conformism) and of the injunctive norm (sensitivity to moral pressure) in the utility functions of farmers. More generally, our model can explain why social groups are sometimes trapped in low public-good-contribution equilibria, even when public subsidies to contributors are high. We make policy recommendations to help reach higher contribution equilibria, with a specific focus on the farm policy context.

Keywords: Payments for environmental services; Social norms; Voluntary contribution to a public good; Behaviour; Farmers (search for similar items in EconPapers)
JEL-codes: Q18 D03 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s10640-020-00532-y

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