Tax or green nudge? An experimental analysis of pesticide policies in Germany

A psychological study of the inverse relationship between perceived risk and perceived benefit

Matthias Buchholz and Oliver Musshoff

European Review of Agricultural Economics, 2021, vol. 48, issue 4, 940-982

Abstract: We use a business management game to investigate how a pesticide tax and a green nudge affect crop, tillage and pesticide decisions for a virtual farm. Results from German farmers reveal that both policies can reduce pesticide applications. The pesticide tax involves a substantial profit loss. Unlike in the green nudge scenario, participants under pesticide tax adjust their cropping and tillage strategies. We compare farmers’ decisions to those made by a mathematical programming model. Assuming profit maximisation would overestimate farmers’ response to the tax and underestimate the effectiveness of the nudge.

Keywords: pesticide policies; pesticide tax; green nudge; policy impact analysis; business management game (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Tax or Green Nudge? An Experimental Analysis of Pesticide Policies in Germany (2019)
Working Paper: Tax or green nudge? An experimental analysis of pesticide policies in Germany (2018)
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