IDEAS home Printed from https://ideas.repec.org/p/ltr/wpaper/1997.08.html
   My bibliography  Save this paper

Compliance Monitoring and Agri-Environmental Policy

Author

Listed:
  • Chongwoo Choe

    (Department of Economics and Finance, La Trobe University)

  • Iain Fraser

    (Department of Economics and Finance, La Trobe University)

Abstract

This paper uses an optimal contract approach to examine the issue of compliance monitoring in agri-environmental policy when the farmer is risk neutral and risk averse. The environmental agency chooses monitoring accuracy and payments for farmer's (non-)compliance. With a risk-neutral farmer, an optimal policy involves maximum allowable reward for compliance and maximum allowable penalty for non-compliance.

Suggested Citation

  • Chongwoo Choe & Iain Fraser, 1997. "Compliance Monitoring and Agri-Environmental Policy," Working Papers 1997.08, School of Economics, La Trobe University.
    • Handle: RePEc:ltr:wpaper:1997.08
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Fraser, Iain & Edwards, Geoff W., 1997. "UK Agri-Environmental Policy and the GATT Green Box: Keeping the Lid on Pandora's Box," 1997 Conference (41st), January 22-24, 1997, Gold Coast, Australia 136007, Australian Agricultural and Resource Economics Society.
    2. Roland Strausz, 1997. "Delegation of Monitoring in a Principal-Agent Relationship," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(3), pages 337-357.
    3. Kim C. Border & Joel Sobel, 1987. "Samurai Accountant: A Theory of Auditing and Plunder," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(4), pages 525-540.
    4. Choe, Chongwoo, 1998. "Contract design and costly verification games," Journal of Economic Behavior & Organization, Elsevier, vol. 34(2), pages 327-340, February.
    5. Boadway, Robin & Marceau, Nicolas & Marchand, Maurice, 1996. "Time-Consistent Criminal Sanctions," Public Finance = Finances publiques, , vol. 51(2), pages 149-165.
    6. Dilip Mookherjee & Ivan Png, 1989. "Optimal Auditing, Insurance, and Redistribution," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 104(2), pages 399-415.
    7. Schmutzler, Armin & Goulder, Lawrence H., 1997. "The Choice between Emission Taxes and Output Taxes under Imperfect Monitoring," Journal of Environmental Economics and Management, Elsevier, vol. 32(1), pages 51-64, January.
    8. Heyes, Anthony G., 1996. "Cutting environmental penalties to protect the environment," Journal of Public Economics, Elsevier, vol. 60(2), pages 251-265, May.
    9. Martin Whitby & Caroline Saunders, 1996. "Estimating the Supply of Conservation Goods in Britain: A Comparison of the Financial Efficiency of Two Policy Instruments," Land Economics, University of Wisconsin Press, vol. 72(3), pages 313-325.
    10. Khalil Fahad & Lawarree Jacques, 1995. "Input versus Output Monitoring: Who Is the Residual Claimant?," Journal of Economic Theory, Elsevier, vol. 66(1), pages 139-157, June.
    11. Eric Helland, 1998. "The Enforcement Of Pollution Control Laws: Inspections, Violations, And Self-Reporting," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 141-153, February.
    12. Kaplow, Louis & Shavell, Steven, 1994. "Accuracy in the Determination of Liability," Journal of Law and Economics, University of Chicago Press, vol. 37(1), pages 1-15, April.
    13. Rodney B.W. Smith, 1995. "The Conservation Reserve Program as a Least-Cost Land Retirement Mechanism," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(1), pages 93-105.
    14. Paul R. Milgrom, 1981. "Good News and Bad News: Representation Theorems and Applications," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 380-391, Autumn.
    15. Garvie, Devon & Keeler, Andrew, 1994. "Incomplete enforcement with endogenous regulatory choice," Journal of Public Economics, Elsevier, vol. 55(1), pages 141-162, September.
    16. Andrew Keeler, 1995. "Regulatory objectives and enforcement behavior," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 6(1), pages 73-85, July.
    17. Grossman, Sanford J & Hart, Oliver D, 1983. "An Analysis of the Principal-Agent Problem," Econometrica, Econometric Society, vol. 51(1), pages 7-45, January.
    18. Stranlund, John K., 1997. "Public Technological Aid to Support Compliance to Environmental Standards," Journal of Environmental Economics and Management, Elsevier, vol. 34(3), pages 228-239, November.
    19. Rollins, Kimberly & Briggs, Hugh III, 1996. "Moral Hazard, Externalities, and Compensation for Crop Damages from Wildlife," Journal of Environmental Economics and Management, Elsevier, vol. 31(3), pages 368-386, November.
    20. C. Choe & I. Fraser, 1998. "A Note on Imperfect Monitoring of Agri‐Environmental Policy," Journal of Agricultural Economics, Wiley Blackwell, vol. 49(2), pages 250-258, June.
    21. David R. Oglethorpe, 1995. "Sensitivity Of Farm Plans Under Risk‐Averse Behaviour: A Note On The Environmental Implications," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(2), pages 227-232, May.
    22. Nuno Garoupa, 1997. "The Theory of Optimal Law Enforcement," Journal of Economic Surveys, Wiley Blackwell, vol. 11(3), pages 267-295, September.
    23. Iain M. Fraser, 1995. "An Analysis Of Management Agreement Bargaining Under Asymmetric Information," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(1), pages 20-32, January.
    24. Bose, Pinaki, 1995. "Regulatory errors, optimal fines and the level of compliance," Journal of Public Economics, Elsevier, vol. 56(3), pages 475-484, March.
    25. Uwe Latacz‐Lohmann & Carel P. C. M. Van der Hamsvoort, 1998. "Auctions as a Means of Creating a Market for Public Goods from Agriculture," Journal of Agricultural Economics, Wiley Blackwell, vol. 49(3), pages 334-345, September.
    26. repec:bla:jecsur:v:11:y:1997:i:3:p:267-95 is not listed on IDEAS
    27. Babcock, Bruce A. & Lakshminarayan, P. G. & Wu, J. & Zilberman, David, 1997. "Targeting Tools for the Purchase of Environmental Amenities," Staff General Research Papers Archive 5220, Iowa State University, Department of Economics.
    28. Malik, Arun S., 1990. "Markets for pollution control when firms are noncompliant," Journal of Environmental Economics and Management, Elsevier, vol. 18(2), pages 97-106, March.
    29. Jones, Carol Adaire & Scotchmer, Suzanne, 1990. "The social cost of uniform regulatory standards in a hierarchical government," Journal of Environmental Economics and Management, Elsevier, vol. 19(1), pages 61-72, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Arguedas, Carmen & Rousseau, Sandra, 2009. "A note on the complementarity of uniform emission standards and monitoring strategies," Working Papers 2009/12, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
    2. Timo Goeschl & Ole Jürgens, 2014. "Criminalizing environmental offences: when the prosecutor’s helping hand hurts," European Journal of Law and Economics, Springer, vol. 37(2), pages 199-219, April.
    3. Khalil, Fahad & Lawarree, Jacques, 2001. "Catching the agent on the wrong foot: ex post choice of monitoring," Journal of Public Economics, Elsevier, vol. 82(3), pages 327-347, December.
    4. Inés Macho-Stadler, 2008. "Environmental regulation: choice of instruments under imperfect compliance," Spanish Economic Review, Springer;Spanish Economic Association, vol. 10(1), pages 1-21, March.
    5. Suurmond, Guido, 2007. "The effects of the enforcement strategy," MPRA Paper 21142, University Library of Munich, Germany.
    6. Duncan, Alfred J. M. & Nolan, Charles, 2019. "Disputes, debt and equity," Theoretical Economics, Econometric Society, vol. 14(3), July.
    7. Elisa Gerten & Michael Beckmann & Elisa Gerten & Matthias Kräkel, 2022. "Information and Communication Technology, Hierarchy, and Job Design," ECONtribute Discussion Papers Series 189, University of Bonn and University of Cologne, Germany.
    8. Fraser, Iain & Chisholm, Tony, 2000. "Conservation or cultural heritage? Cattle grazing in the Victoria Alpine National Park," Ecological Economics, Elsevier, vol. 33(1), pages 63-75, April.
    9. Carmen Arguedas & Dietrich Earnhart & Sandra Rousseau, 2017. "Non-uniform implementation of uniform standards," Journal of Regulatory Economics, Springer, vol. 51(2), pages 159-183, April.
    10. Huennemeyer, Anne-Juliane & Rollins, Kimberly S., 2001. "Private Resource Management And Public Trust: Optimal Resource Conservation Contracts Under Asymmetric Information," Working Papers 34141, University of Guelph, Department of Food, Agricultural and Resource Economics.
    11. Strausz, Roland, 2006. "Buried in paperwork: Excessive reporting in organizations," Journal of Economic Behavior & Organization, Elsevier, vol. 60(4), pages 460-470, August.
    12. Hindriks, Jean, 1999. "On the incompatibility between revenue maximisation and tax progressivity1," European Journal of Political Economy, Elsevier, vol. 15(1), pages 123-140, March.
    13. Aaron Finkle, "undated". "Obstructive Monitoring," Working Papers 14-05, Davidson College, Department of Economics.
    14. Germani, Anna Rita & Morone, Andrea & Morone, Piergiuseppe & Scaramozzino, Pasquale, 2013. "Discretionary enforcement and strategic interactions between firms, regulatory agency and justice department: a theoretical and empirical investigation," MPRA Paper 51369, University Library of Munich, Germany.
    15. repec:dau:papers:123456789/6456 is not listed on IDEAS
    16. Guillaume Roger, 2016. "A Revelation Mechanism for Soft Information under Moral Hazard," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 18(5), pages 752-763, October.
    17. Leandro Arozamena & Martin Besfamille & Pablo Sanguinetti, 2010. "Optimal taxes and penalties when the government cannot commit to its audit policy," Department of Economics Working Papers 2010-10, Universidad Torcuato Di Tella.
    18. Sandeep Baliga & Tomas Sjöström, 2008. "Strategic Ambiguity and Arms Proliferation," Journal of Political Economy, University of Chicago Press, vol. 116(6), pages 1023-1057, December.
    19. William S. Neilson & Geum Soo Kim, 2001. "A Standard‐Setting Agency and Environmental Enforcement," Southern Economic Journal, John Wiley & Sons, vol. 67(3), pages 757-763, January.
    20. Joseph G. Haubrich, 1995. "Imperfect state verification and financial contracting," Working Papers (Old Series) 9506, Federal Reserve Bank of Cleveland.
    21. Annamaria Menichini & Peter Simmons, 2001. "Are two investors better than one?," CSEF Working Papers 71, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ltr:wpaper:1997.08. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Stephen Scoglio (email available below). General contact details of provider: https://edirc.repec.org/data/sblatau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.