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A goal-framing approach to green payments' efficiency when vertical integration is an option

Giorgos Diakoulakis and Athanasios Kampas ()

No 2020-1, Working Papers from Agricultural University of Athens, Department Of Agricultural Economics

Abstract: This article explores farmer's decisions regarding the expansion of organic farming through intensive input use and the degree of in-house organic fertilizer production. Using a theoretical synthesis of two strands of the scholarly literature, namely pro-environmental norms and the goal-framing theory, the contribution of this article to the current literature is: (i) it redefines the concept of the crowding effects, which encompasses both changes in environmental preferences and in normative objectives; (ii) it points that the impact of a green payment on vertical integration depends on both the relative (i.e. the direction) and the absolute (i.e. the magnitude) size of the crowding effect being expected; (iii) it states that a trade-off between input use and vertical integration does always exist once a land subsidy is implemented, but not necessarily if a price premium is offered instead.

Keywords: personal and social norms; crowding theory; goal-framing theory; green payments; vertical integration (search for similar items in EconPapers)
JEL-codes: Q18 Q58 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2020
New Economics Papers: this item is included in nep-env
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Handle: RePEc:aua:wpaper:2020-1