Set-Aside versus Quotas in Contracts for Agro-Environmental Regulation

Anne-Sophie Crepin and Pierre-Alain Jayet

No 24950, 2002 International Congress, August 28-31, 2002, Zaragoza, Spain from European Association of Agricultural Economists

Abstract: In this paper, we analyze the simultaneous regulation of several goods produced on agricultural land such as environmental amenities and crops. This analysis is conducted using a general two goods model where all agricultural land is used for production. The regulation authority can regulate these goods either through set aside requirements or production quotas. The paper focuses on information asymmetry about some farm performance index creating adverse selection. When public funds are non costly we show that the net social welfare induced by the two types of contracts are equal. In general we also show that if the goal of the regulation is to decrease the production of the quota good it is better to use the quota contract. On contrary if the regulation aims at increasing the production of the quota good, it is better to use a set aside contract.

Keywords: Political; Economy (search for similar items in EconPapers)
Pages: 23
Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/24950/files/cp02cr56.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae02:24950

DOI: 10.22004/ag.econ.24950

Access Statistics for this paper

More papers in 2002 International Congress, August 28-31, 2002, Zaragoza, Spain from European Association of Agricultural Economists Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().