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Additionality Violations in Agricultural Payment for Service Programs: Experimental Evidence

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  • Gregory Howard

Abstract

This article defines perfect program additionality (PPA) for payment for ecosystem services subsidy programs and formalizes potential violations of PPA. PPA is examined for multiple subsidy programs in an experimental setting using a variant of the common public good game. A large proportion of subsidized activities are found to be nonadditional. Further, two sources of nonadditionality are identified and tested for: the pay-for-nothing effect and crowding-out. The extent to which subsidies generate truly additional benefits is a function of both the design of the subsidy program and, crucially, whether the incentivized best management practice acts as a substitute for other best management practices.

Suggested Citation

  • Gregory Howard, 2020. "Additionality Violations in Agricultural Payment for Service Programs: Experimental Evidence," Land Economics, University of Wisconsin Press, vol. 96(2), pages 244-264.
    • Handle: RePEc:uwp:landec:v:96:y:2020:i:2:p:244-264
    Note: DOI: 10.3368/le.96.2.244
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    File URL: http://le.uwpress.org/cgi/reprint/96/2/244
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    Citations

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    Cited by:

    1. Reinhard Uehleke & Heidi Leonhardt & Silke Hüttel, 2024. "Counterfactual evaluation of two Austrian agri‐environmental schemes in 2014–2018," Agricultural Economics, International Association of Agricultural Economists, vol. 55(1), pages 27-40, January.
    2. Wan, Xiaolan & Howard, Gregory & Zhang, Wendong, 2022. "Enrollment Restrictions and the Adoption of Conservation Practices in the U.S. Corn Belt," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322793, Agricultural and Applied Economics Association.

    More about this item

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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