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Using Choice Framing to Improve the Design of Agricultural Subsidy Schemes

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  • Neel Ocean
  • Peter Howley

Abstract

Existing agri-environment schemes have suffered from poor uptake and high burden. This article leverages behavioral economics to test choice framing in three hypothetical policy scenarios. Using a randomized survey experiment on U.K. farmers, we find that changing policy framing based on mental accounting and loss aversion can significantly influence agricultural policy–related decision making. Our findings highlight the following considerations for the design of future policy: (1) whether application costs are integrated into or segregated from a subsidy is important, (2) the labeling of agricultural schemes may affect expenditure allocation, and (3) reference points can affect the evaluation of new scheme alternatives.

Suggested Citation

  • Neel Ocean & Peter Howley, 2021. "Using Choice Framing to Improve the Design of Agricultural Subsidy Schemes," Land Economics, University of Wisconsin Press, vol. 97(4), pages 933-950.
    • Handle: RePEc:uwp:landec:v:97:y:2021:i:4:p:933-950
    Note: DOI: 10.3368/le.97.4.041620-0055R1
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    File URL: http://le.uwpress.org/cgi/reprint/97/4/933
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    Citations

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    Cited by:

    1. Robert Finger & Viviana Garcia & Chloe McCallum & Jens Rommel, 2024. "A note on European farmers' preferences under cumulative prospect theory," Journal of Agricultural Economics, Wiley Blackwell, vol. 75(1), pages 465-472, February.
    2. Chai, Yuan & J. Pannell, David & G. Pardey, Philip, 2023. "Nudging farmers to reduce water pollution from nitrogen fertilizer," Food Policy, Elsevier, vol. 120(C).
    3. Palm-Forster, Leah H. & Taylor, Mykel & Banerjee, Simanti & Xie, Lusi, 2023. "Factors influencing enrollment of leased cropland in the Conservation Stewardship Program in Kansas," Land Use Policy, Elsevier, vol. 135(C).
    4. SASAKI, Hiroki & HORIE, Shinya & HORIE, Tetsuya & TANAKA, Katsuya, 2024. "Assessing the Effects of Nudge and Boost for Methane Emission Reduction from Paddy Field- Cluster Randomized Controlled Trial in Japan," IAAE 2024 Conference, August 2-7, 2024, New Delhi, India 344318, International Association of Agricultural Economists (IAAE).
    5. Peter Howley & Neel Ocean, 2022. "Can nudging only get you so far? Testing for nudge combination effects," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 49(5), pages 1086-1112.
    6. Huber, Robert & Späti, Karin & Finger, Robert, 2023. "A behavioural agent-based modelling approach for the ex-ante assessment of policies supporting precision agriculture," Ecological Economics, Elsevier, vol. 212(C).

    More about this item

    JEL classification:

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

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