Environmental identity economics: an application to farmers’ pro-environmental investment behaviour

Kahsay Haile Zemo and Mette Termansen

European Review of Agricultural Economics, 2022, vol. 49, issue 2, 331-358

Abstract: This study proposes an environmental identity economics theory that can improve our understanding of pro-environmental behaviour. We test the potential of the theory by analysing farmers’ decisions to invest in renewable energy production using a hybrid choice model. Our findings illustrate that farmers with a strong environmental identity require less financial incentive to invest. Furthermore, lower compensation is found to be sufficient to induce farmers with a strong environmental identity to commit to more binding investment contracts. Our findings stress the need for differentiated designs of agri-environmental programmes and mechanisms that enhance farmers’ environmental identity.

Keywords: environmental identity; identity economics; hybrid choice model; agri-environmental schemes; choice experiment (search for similar items in EconPapers)
Date: 2022
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