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This empirical study investigates the effects of different agri-environmental schemes on individualproducer behaviour. We consider the effects on production intensity, performance and structure for asample of UK cereal farms for the period 2000 to 2009 and use the policy examples of theEnvironmental Stewardship Scheme (ESS) and the Nitrate Vulnerable Zones (NVZ). The econometricmethodology is based on a directional distance function framework as well as the application ofpropensity score analysis by the use of matching estimators. We find that both schemes are effectivelyinfluencing production behaviour at individual farm level. However, agri-environmental schemes showonly very minor effects on the technical and allocative efficiency of farms, hence, we can conclude thatfarms enrolled in agri-environmental schemes are efficiently adjusting their production decisions giventhe constraints by the respective scheme. Farms affected by these schemes indeed tend to become lessspecialised and more diversified with respect to their production structure. A voluntary type agrienvironmentalscheme seems to signficantly influence producer behaviour at a far higher scale than anon-voluntary agri-environmental scheme. The methodological novelty of this research lies in the use ofa sound production theory based multi-output multi-input approach to disentangle measures forproduction performance and structure which are then used as indicators for the robust treatment effects’analyses.

Keywords: Agri-Environmental Policy ; PES ; Distance Function ; Propensity Score Matching

Subject(s): Environmental Economics and Policy

Issue Date: 2012-04

Publication Type: Conference Paper/ Presentation

PURL Identifier:

Total Pages: 34

JEL Codes: Q15; Q18; Q57; C23

Record appears in: Agricultural Economics Society > 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK

Autor: Sauer, Johannes ; Walsh, John ; Zilberman, David


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