Nitrogen runoffs induced by agricultural fertilisation cause serious environmental damage to surface waters. Environmental and consumer protectionists demand government intervention to mitigate these externalities. With this in mind, the present study examines the effects of nudge-based regulatory strategies. We use an incentivised single-player multi-period business management game as an experimental device to study how nudges affect compliance with the minimum-distance-to-water rule in a sample of German farmers. We investigate two different nudge treatments: a nudge with information and pictures showing environmental and health damages that are presumably caused by breaching the minimum-distance-towater rule, and a nudge with an additional social comparison suggesting that the majority of farmers in the same region comply with the rule. We observe three core experimental outcomes: first, nudging has a preventive effect and reduces the share of non-compliant participants. Second, against all expectations, the preventive effect of the nudge with an additional social comparison is weaker than that of the nudge with information and pictures alone. Third, despite the overall positive effects of nudging, the nudge with social comparison even increased the severity of non-complying behaviour in the deviant subpopulation. Abstract 4Nitrogen runoffs induced by agricultural fertilisation cause serious environmental damage to surface 5 waters. Environmental and consumer protectionists demand government intervention to mitigate these 6 externalities. With this in mind, the present study examines the effects of nudge-based regulatory 7 strategies. We use an incentivised single-player multi-period business management game as an 8 experimental device to study how nudges affect compliance with the minimum-distance-to-water rule 9 in a sample of German farmers. We investigate two different nudge treatments: a nudge with 10 information and pictures showing environmental and health damages that are presumably caused by 11 breaching the minimum-distance-to-water rule, and a nudge with an additional social comparison 12 suggesting that the majority of farmers in the same region comply with the rule. We observe three core 13 experimental outcomes: first, nudging has a preventive effect and reduces the share of non-compliant 14 participants. Second, against all expectations, the preventive effect of the nudge with an additional 15 social comparison is weaker than that of the nudge with information and pictures alone. Third, despite 16 the overall positive effects of nudging, the nudge with social comparison even increased the severity 17 of non-complying behaviour in the deviant subpopulation. 18 Key Words 19Green nudge, behavioural economics, business management games, ex-ante policy impact analysis 20 JEL Classifications 21 Q18, Q28, Q53, Q58, D91 22
Increasing popularity of economic experiments for policy impact analysis has led to an ongoing debate about the suitability of students to substitute professionals as experimental subjects. To date, subject pool effects in agricultural and resource economics experiments have not been sufficiently studied. In order to identify differences and similarities between students and non-students, we carry out an experiment in the form of a multi-period business management game that is adapted to an agri-environmental context. We compare the compliance behaviour of German agricultural students and German farmers with regard to water protection rules and analyse their responses to two different green nudge interventions. The experimental results reveal that the direction of the response to the policy treatments is similar. Even unexpected behaviour could be reproduced by the student sample. Nevertheless, the magnitude of the treatment effects differed between the two samples. This implies that experimenters in the field of agricultural and resource economics could use the subject pool of students to analyse the direction of nudge policies. If predictions should be made about the magnitude effects, we suggest using a professional subject pool.
Going beyond the rational choice approach used in conventional economics of crime, the question arises whether psychological personality traits analysis can contribute to a better understanding of non-compliance and, eventually, to the prevention of illicit behaviours. This study investigated how personality traits are related to compliance with environmental regulation in agriculture. The object of study was a water-protection rule that required farmers using fertilising to keep it a minimum distance away from nearby water bodies. Self-interested infringements can cause serious environmental damage to waters (negative externalities) through nitrogen runoff. In a survey among German farmers, we employed a 10-item version of the Big Five Inventory to measure the traits that are used as predictor variables in a regression analysis. The outcome variable was the farmers’ compliance behaviour in a business management game where rule-breaking was more profitable than rule-abidance. Some noteworthy findings were observed in the surveyed sample. (i) Neuroticism was positively related to ‘overall compliance’, measured as a binary yes/no variable; that is, more anxious farmers were less prone to rule-breaking. Surprisingly, however, a positive relationship between neuroticism and compliance was not found when looking separately at the deviant subgroup; here, greater neuroticism was associated with more severe rule violations, in terms of illicitly fertilised acreage. (ii) In the deviant subgroup, as might have been expected, higher levels of conscientiousness were associated with less severe rule-violations. Contrary to expectations, again, higher levels of agreeableness were linked to more severe non-compliance. A substantial positive relationship was found between extraversion and the severity of non-compliance, in accordance with ex-ante expectation. For openness to experience, no noteworthy results were obtained. The results indicate that agents with heterogeneous personality traits might react differently to identical economic and institutional environments. Moreover, it is suggested that, other than traits, there is another quality in agents (e.g. social control) that may have a decisive influence on their belonging to the compliant or non-compliant subpopulation. Farmers’ responses to changes brought forward by regulators who aim to prevent rule-breaking might therefore differ as well.
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