Producer Behaviour and Agri-Environmental Policies: A Directional Distance based Matching Approach

Johannes Sauer, John Walsh and David Zilberman

No 124877, 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington from Agricultural and Applied Economics Association

Abstract: This empirical study investigates the effects of different agri-environmental schemes on individual producer behaviour. We consider the effects on production intensity, performance and structure for a sample of UK cereal farms for the period 2000 to 2009 and use the policy examples of the Environmental Stewardship Scheme (ESS) and the Nitrate Vulnerable Zones (NVZ). The econometric methodology is based on a directional distance function framework as well as the application of propensity score analysis by the use of matching estimators. We find that both schemes are effectively influencing production behaviour at individual farm level. However, agri-environmental schemes show only very minor effects on the technical and allocative efficiency of farms, hence, we can conclude that farms enrolled in agri-environmental schemes are efficiently adjusting their production decisions given the constraints by the respective scheme. Farms affected by these schemes indeed tend to become less specialised and more diversified with respect to their production structure. A voluntary type agrienvironmental scheme seems to signficantly influence producer behaviour at a far higher scale than a non-voluntary agri-environmental scheme. The methodological novelty of this research lies in the use of a sound production theory based multi-output multi-input approach to disentangle measures for production performance and structure which are then used as indicators for the robust treatment effects’ analyses.

Keywords: Institutional and Behavioral Economics; Productivity Analysis; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 35
Date: 2012
New Economics Papers: this item is included in nep-eff and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea12:124877

DOI: 10.22004/ag.econ.124877

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