This study investigates the behavioral economic underpinnings of current policy approaches to integrate environmental objectives into the Common Agricultural Policy. We conduct an economic lab-in-thefield experiment with farmers in Germany. We analyze the impact of the following policy design features on farmers' decisions to adopt sustainable agricultural practices: (i) framing of the policy: whether farmers perceive themselves as being part of the problem or the solution, (ii) degree of control: mandatory vs. voluntary policy (iii) framing of incentives as either losses or gains. All policy designs tested result in a significant increase in hectares conserved compared to a baseline scenario without policy. Also behavioral factors do significantly affect farmers' behavior at the individual level. Only framing is found to significantly affect policy effectiveness.
Choosing an appropriate statistical model to analyze reciprocal relations between individuals’ attitudes, beliefs, or behaviors over time can be challenging. Often, decisions for or against specific models are rather implicit and it remains unclear whether the statistical approach fits the theory of interest. For longitudinal models, this is problematic since within- and between-person processes can be confounded leading to wrong conclusions. Taking the perspective of the reinforcing spirals model (RSM) focusing on media effects and selection, we compare six statistical models that were recently used to analyze the RSM and show their ability to separate within- and between-person components. Using empirical data capturing respondents’ development during adolescence, we show that results vary across statistical models. Further, Monte Carlo simulations indicate that some approaches might lead to wrong conclusions if specific communication dynamics are present. In sum, we recommend using approaches that explicitly model and clearly separate within- and between-person effects.
Summary
In order to keep pace with the evolution of the objectives and means of the EU's Common Agricultural Policy, evaluation tools also need to adapt. A set of tools that have proved highly effective in other policy fields is economic experiments. These allow the testing of a new policy before its implementation, provide evidence of its specific effects, and identify behavioural dimensions that can influence policy outcomes. We argue that agricultural policy should be subject to economic experiments, providing examples to illustrate how they can inform CAP design. We identify the additional efforts needed to establish further proof‐of‐concept, by running more – and more robust – experiments related to the CAP. This can happen only by integrating experimental evaluation results within the policy cycle and addressing ethical and practical challenges seriously. To do so, researchers would benefit from a concerted European effort to promote the methodology across the EU; organise the replication in time and across Europe of experiments relevant for the CAP; and build a multi‐national panel of farmers willing to participate in experiments. Steps are being taken in this direction by the Research Network of Economics Experiments for CAP evaluation (REECAP).
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