On the use of targeting to reduce moral hazard in agri-environmental schemes

Robert Fraser

No 57867, 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia from Australian Agricultural and Resource Economics Society

Abstract: This paper investigates the role of targeting in the context of agri-environmental schemes involving monitoring and penalties and well suited to a geographically-based distinction between participants. By separating participants into a target and a non-target group the aim of targeting is to reduce the moral hazard problem. The paper analyses three approaches to targeting and the focus is on reducing the extent of cheating by participants in the non-target group. By complementing the adoption of targeting with appropriate adjustments to the monitoring/penalty parameters it is shown how such an approach can exploit the risk aversion of participants to completely eliminate cheating by those participants in the non-target group.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 25
Date: 2003-02
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Citations: View citations in EconPapers (1)

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Journal Article: On the Use of Targeting to Reduce Moral Hazard in Agri‐environmental Schemes (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aare03:57867

DOI: 10.22004/ag.econ.57867

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