Nudging Farmers to Comply With Water Protection Rules – Experimental Evidence From Germany

Abstract

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

Can personality traits explain compliance behaviour? - A study of compliance with water-protection rules in German agriculture

“…However, three results were salient regarding the effects on Tiers 1 and 2, if the effects of each variable are considered jointly for both tiers. The negative relation of agricultural training to both the probability (AME = -0.11) and severity (AME = -659.10) of rulebreaking was a remarkable result, which was also found in the study of Peth et al (2018). Educational effects, in the form of learned knowledge, on environment-related issues and the correction of inefficient skills (e.g.…”

“…More precisely, 52.1% of the participants were risk-averse, 36.8% were risk-neutral and only 11.0% were risk-seekers. The corresponding questionnaire, containing the sociodemographic and farm characteristics, can be found in Peth et al (2018).…”

“…Appendix A describes the game. A deeper insight into the BMG and its parameters is given in Peth et al (2018), who analysed the effects of different policy scenarios on farmers' decision behaviours.…”

“…As a financial incentive, the prize money was placed in the context of a roll of a 10-sided dice. A more detailed description of the HLL and the financial incentives can be found in Peth et al (2018), Subsection 2.6 and Appendix C.…”

Speaking of safety

“…Lastly, nudging aims to influence people's choices and alter their behaviour by adapting aspects of the choice architecture, without forbidding or making it impossible to do otherwise (for more information see Thaler & Sunstein, 2008). Nudges have been proposed already by others (e.g., Lindhout & Reniers, 2017) to improve occupational safety and has been proved effective in increasing rule compliance among farmers (Peth, Mußhof, Funke, & Hirschauer, 2018), and helping people to make securer decisions in connecting to wireless networks (Turland, Coventry, Jeske, Briggs, & Van Moorsel, 2015).…”