Experimental study of effectiveness of nonpoint source water pollution control group contract

Helen Pushkarskaya (), Hal Arkes, Jason Pieratt and Ibrahim Bamba

No 19309, 2005 Annual meeting, July 24-27, Providence, RI from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: The goal of this experimental study was to test an effectiveness of a group contract designed to control nonpoint source water pollution from farms' runoff (Pushkarskaya 2003). In particular, the regulator pays for pollution reduction credits earned by the group of the farmers, who voluntary enter the contract, and is concerned only with the total level of the abatement achieved, while the group of farmers undertakes responsibility to distribute the payment so as to induce the farmers to deliver the desired level of abatement. First round of experiments was conducted using as subjects undergraduate students from the Ohio State University, second round of experiments was conducted using as a subjects Kentucky farmers, who would be an actual subjects to this policy if it is ever implemented. Experiments with farmers can be considered as an intermediate step between traditional experiments with undergraduate students and field experiments. Results of these experiments suggest, in contrast to common believes among environmental economists, that uncertainty, associated with diffusive nature of nonpoint source water pollution, not only does not affect negatively farmers' participation in the program, but also might play a positive role in promoting a cooperation within a group.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 20
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea05:19309

DOI: 10.22004/ag.econ.19309

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