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Using choice experiments to improve the design of agri-environmental schemes

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  • Uwe Latacz-Lohmann
  • Gunnar Breustedt

Abstract

This study applies a two-stage analysis of discrete–continuous supply of environmental services, based on an extended discrete choice experiment (DCE) with 68 farmers in Northern Germany. The estimation strategy combined a multinomial Heckman model and an OLS regression. We extend the literature by feeding the estimation results into a contract optimisation model for a stylised conservation scheme. The optimised contract differed significantly from the standard contract, which offered farmers a payment equal to the average cost of service provision. The standard contract yielded only 64 per cent of the environmental service of the optimised contract for the same budget outlay.

Suggested Citation

  • Uwe Latacz-Lohmann & Gunnar Breustedt, 2019. "Using choice experiments to improve the design of agri-environmental schemes," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 46(3), pages 495-528.
    • Handle: RePEc:oup:erevae:v:46:y:2019:i:3:p:495-528.
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    File URL: http://hdl.handle.net/10.1093/erae/jbz020
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    2. Bougherara, Douadia & Lapierre, Margaux & Préget, Raphaële & Sauquet, Alexandre, 2021. "Do farmers prefer increasing, decreasing, or stable payments in Agri-environmental schemes?," Ecological Economics, Elsevier, vol. 183(C).
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    4. Christian Stetter & Philipp Mennig & Johannes Sauer, 2022. "Using Machine Learning to Identify Heterogeneous Impacts of Agri-Environment Schemes in the EU: A Case Study," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 49(4), pages 723-759.
    5. Blazy, J.-M. & Subervie, J. & Paul, J. & Causeret, F. & Guindé, L. & Moulla, S. & Thomas, A. & Sierra, J., 2021. "Ex-ante assessment of the cost-effectiveness of public policies to sequester carbon in soils," Ecological Economics, Elsevier, vol. 190(C).
    6. Tyllianakis, Emmanouil & Martin-Ortega, Julia, 2021. "Agri-environmental schemes for biodiversity and environmental protection: How we are not yet “hitting the right keys”," Land Use Policy, Elsevier, vol. 109(C).
    7. Le Gloux, Fanny & Ropars-Collet, Carole & Issanchou, Alice & Dupraz, Pierre, 2023. "Payments for environmental services with ecological thresholds: farmers’ preferences for a sponsorship bonus," Working Papers 337160, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).
    8. Hecker, Lutz Philip & Sturm, Astrid & Querhammer, Lisa & Wätzold, Frank, 2024. "Cost-effectiveness of state-dependent versus state-independent agri-environment schemes for biodiversity conservation," Ecological Economics, Elsevier, vol. 217(C).
    9. Elizabeth Canales & Jason S. Bergtold & Jeffery R. Williams, 2024. "Conservation intensification under risk: An assessment of adoption, additionality, and farmer preferences," American Journal of Agricultural Economics, John Wiley & Sons, vol. 106(1), pages 45-75, January.
    10. Christoph Schulze & Katarzyna Zagórska & Kati Häfner & Olimpia Markiewicz & Mikołaj Czajkowski & Bettina Matzdorf, 2024. "Using farmers' ex ante preferences to design agri‐environmental contracts: A systematic review," Journal of Agricultural Economics, Wiley Blackwell, vol. 75(1), pages 44-83, February.
    11. Bougherara, Douadia & Lapierre, Margaux & Préget, Raphaële & Sauquet, Alexandre, 2021. "Do farmers prefer increasing, decreasing, or stable payments in Agri-environmental schemes?," Ecological Economics, Elsevier, vol. 183(C).
    12. Lapierre, Margaux & Le Velly, Gwenolé & Bougherara, Douadia & Préget, Raphaële & Sauquet, Alexandre, 2023. "Designing agri-environmental schemes to cope with uncertainty," Ecological Economics, Elsevier, vol. 203(C).
    13. Massfeller, Anna & Meraner, Manuela & Hüttel, Silke & Uehleke, Reinhard, 2021. "Farmers' Acceptance of Result-Based Agri-Environmental Schemes - Insights from a Case Study in North Rhine-Westphalia," 2021 Conference, August 17-31, 2021, Virtual 315148, International Association of Agricultural Economists.
    14. Matteo Olivieri & Maria Andreoli & Daniele Vergamini & Fabio Bartolini, 2021. "Innovative Contract Solutions for the Provision of Agri-Environmental Climatic Public Goods: A Literature Review," Sustainability, MDPI, vol. 13(12), pages 1-22, June.
    15. Romy Greiner, 2023. "Examining Participation in and Supply of Private Land for Voluntary Conservation in Australia’s Tropical Savannas: A Discrete-Continuous Choice Experiment," Land, MDPI, vol. 12(7), pages 1-19, June.
    16. Canessa, Carolin & Venus, Terese & Wiesmeier, Miriam & Mennig, Philipp & Sauer, Johannes, 2023. "Farmers’ preferences over alternative AECS designs. Do the ecological conditions influence the willingness to accept result-based contracts?," 97th Annual Conference, March 27-29, 2023, Warwick University, Coventry, UK 334508, Agricultural Economics Society - AES.
    17. Thiermann, Insa & Silvius, Brechtje & Splinter, Melody & Dries, Liesbeth, 2023. "Making bird numbers count: Would Dutch farmers accept a result-based meadow bird conservation scheme?," Ecological Economics, Elsevier, vol. 214(C).
    18. Prasenjit Banerjee & Rupayan Pal & Ada Wossink & James Asher, 2021. "Heterogeneity in Farmers’ Social Preferences and the Design of Green Payment Schemes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 78(2), pages 201-226, February.
    19. Sergei Schaub & Jaboury Ghazoul & Robert Huber & Wei Zhang & Adelaide Sander & Charles Rees & Simanti Banerjee & Robert Finger, 2023. "The role of behavioural factors and opportunity costs in farmers' participation in voluntary agri‐environmental schemes: A systematic review," Journal of Agricultural Economics, Wiley Blackwell, vol. 74(3), pages 617-660, September.
    20. Massfeller, Anna & Meraner, Manuela & Hüttel, Silke & Uehleke, Reinhard, 2022. "Farmers' acceptance of results-based agri-environmental schemes: A German perspective," Land Use Policy, Elsevier, vol. 120(C).

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