No abstract

This paper examines which factors determine the participation of households in long term contracting with local farmers. Are households motivated by reducing the environmental impacts of their food consumption? A discrete-choice model of community supported agriculture (CSA) participation is applied to a sample of 264 French households. The findings suggest that difficult-to-measure attributes, notably environmental considerations play a major role in explaining CSA participation.

Ever since Ellsberg (1961), the distinction between risk, where agents assign well-defined probabilities to possible outcomes, and ambiguity, where agents do not, has been of particular interest. Using a carefully-designed field experiment, we elicit information about risk and ambiguity preferences among 197 French farmers and structurally estimate these preferences. We use cumulative prospect theory and a multiple-prior model in order to model risk and ambiguity preferences, respectively. We find that farmers are risk, ambiguity, and loss averse, and that probability distortion differs in gains vs. losses, as well as in risk vs. ambiguity. These findings can have important implications for policy design.

labelling, ecolabelling, policy, environmental elasticity,

Nearly all Agri-Environmental Schemes (AES) offer stable annual payments over the duration of the contract. Yet AES are often intended to be a transition tool, designed to trigger changes in farming practices rather than to support them indefinitely. A decreasing sequence of payments thus appears particularly attractive as a reward structure for AES. The standard discounted utility model supports this notion by predicting that individuals should prefer a decreasing sequence of payments if the total sum of outcomes is constant. Nevertheless, the literature shows that numerous mechanisms, such as increasing productivity, anticipatory pleasure, and loss aversion, can, by contrast, incline individuals to favor an increasing sequence of payments. To understand the preferences of farmers for different payment sequences, we propose a review of the mechanisms highlighted by the literature in psychology and economics. We then test farmers' preferences for stable, increasing or decreasing payments through a choice experiment (CE) survey. In this survey, farmers are offered hypothetical contracts rewarding the planting of cover crops. To reduce hypothetical bias, the choice cards were designed following repeated interactions with local stakeholders. One hundred twenty-three French farmers, about 15% of those contacted, responded to the survey. Overall, farmers do not present a clear willingness to depart from the usual stable payments. Nevertheless, 17% declare a preference for increasing sequences of payment. Moreover, we find a significant rejection of decreasing payments by farmers with a lower discount rate or farmers more willing to take risks than the median farmer, contradicting the discounted utility model.

No abstract

We replicate Bocquého et al. (2014), who used multiple price lists to investigate the risk preferences of 107 French farmers. We collected new data from 1430 participants in 11 European farming systems. In agreement with the original study, farmers' risk preferences are best described by Cumulative Prospect Theory.The views expressed are purely those of the authors and may not, in any circumstances, be regarded as stating an official position of the European Commission.

In community-supported agriculture (CSA), consumers face a tradeoff between (i.) the desire to support a CSA farmer and obtain environmentally-friendly goods and (ii.) the risk associated with a long-term commitment. We elicit inequality aversion and risk preferences of a sample of 162 French CSA consumers using incentivized field experiments. We find that CSA consumers are concerned about payoff inequalities. While we obtain evidence of advantageous inequality aversion toward CSA farmers, we also find disadvantageous inequality seeking.We find that CSA consumers are risk averse and loss averse and distort probabilities. We also observe that inequality and risk preferences in the loss domain might complement each other to strengthen consumers' support for CSA farmers.