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Unintended Consequences of Environmental Policies: the Case of Set-aside and Agricultural Intensification

Conséquences involontaires des politiques environnementales: le cas du gel des terres et de l'intensification de l'agriculture

Raja Chakir () and Alban Thomas ()

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Abstract: The objective of this paper is to evaluate the indirect impacts of a set-aside policy on the environment through crop intensification. We estimate a structural, multi-output model on a panel of French farmers from 2006 to 2010, accounting for multivariate selection (corner solutions) on crops and land use. We use a parametric and a semi-nonparametric (based on sieve estimation) version of a quasi-maximum likelihood (QML) estimator, compare their goodness of fit and parameter efficiency and check for closeness with a test for non-nested models. We then perform a simulation experiment based on elasticity estimates for set-aside area and input demand, to evaluate intensive margin effects of the set-aside policy. Results show that a set-aside subsidy can provide farmers with incentives to intensify their production, leading to potential adverse environmental effects.

Keywords: Fertilizer and pesticide input demand; Semi-nonparametric estimation; Set-aside; Land use; Corner solutions (search for similar items in EconPapers)
Date: 2022
Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-03550528
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Published in Environmental Modeling & Assessment, Springer, 2022, 27 (2), pp.363-384. ⟨10.1007/s10666-021-09815-0⟩

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Working Paper: Unintended consequences of environmental policies: the case of set-aside and agricultural intensification (2020) Downloads
Working Paper: Unintended consequences of environmental policies: the case of set-aside and agricultural intensification (2020) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03550528

DOI: 10.1007/s10666-021-09815-0

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