Farmers Follow the Herd: A Theoretical Model on Social Norms and Payments for Environmental Services

The economic literature on Payments for Environmental Services (PES) has studied extensively the behavioural factors that prevent farmers from signing PES contracts, even when the payments exceed the expected opportunity costs. This article provides a theoretical model of the role played by the inte...

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Published inEnvironmental & resource economics Vol. 78; no. 2; pp. 287 - 306
Main Authors Le Coent, Philippe, Préget, Raphaële, Thoyer, Sophie
Format Journal Article
LanguageEnglish
Published Dordrecht Springer Netherlands 01.02.2021
Springer Nature B.V
Springer
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Abstract The economic literature on Payments for Environmental Services (PES) has studied extensively the behavioural factors that prevent farmers from signing PES contracts, even when the payments exceed the expected opportunity costs. This article provides a theoretical model of the role played by the interplay of descriptive and injunctive social norms in farmers’ decisions. When they choose to contribute voluntarily to an environmental public good, farmers may be driven by descriptive norms akin to conformity (do as the majority of their peers) as well as by injunctive norms (in line with what society expects them to do), which are the equivalent of a social injunction to act in favour of the environment. The interactions between these two social norms can yield multiple equilibria, depending on the relative weight of the descriptive norm (sensitivity to conformism) and of the injunctive norm (sensitivity to moral pressure) in the utility functions of farmers. More generally, our model can explain why social groups are sometimes trapped in low public-good-contribution equilibria, even when public subsidies to contributors are high. We make policy recommendations to help reach higher contribution equilibria, with a specific focus on the farm policy context.
AbstractList The economic literature on Payments for Environmental Services (PES) has studied extensively the behavioural factors that prevent farmers from signing PES contracts, even when the payments exceed the expected opportunity costs. This article provides a theoretical model of the role played by the interplay of descriptive and injunctive social norms in farmers’ decisions. When they choose to contribute voluntarily to an environmental public good, farmers may be driven by descriptive norms akin to conformity (do as the majority of their peers) as well as by injunctive norms (in line with what society expects them to do), which are the equivalent of a social injunction to act in favour of the environment. The interactions between these two social norms can yield multiple equilibria, depending on the relative weight of the descriptive norm (sensitivity to conformism) and of the injunctive norm (sensitivity to moral pressure) in the utility functions of farmers. More generally, our model can explain why social groups are sometimes trapped in low public-good-contribution equilibria, even when public subsidies to contributors are high. We make policy recommendations to help reach higher contribution equilibria, with a specific focus on the farm policy context.
This article analyses the role played by social norms in farmers’ decisions to enroll into an agri-environmental scheme (AES). First, it develops a simple theoretical model highlighting the interplay of descriptive and injunctive norms in farmers’ utility functions. Second, an empirical valuation of the effect of social norms is provided based on the results of a stated preference survey conducted with 98 wine-growers in the South of France. Proxies are proposed to capture and measure the weight of social norms in farmers’ decision to sign an agri-environmental contract. Our empirical results indicate that the injunctive norm seems to play a stronger role than the descriptive norm.
Author Préget, Raphaële
Le Coent, Philippe
Thoyer, Sophie
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  surname: Le Coent
  fullname: Le Coent, Philippe
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  givenname: Raphaële
  orcidid: 0000-0003-2650-148X
  surname: Préget
  fullname: Préget, Raphaële
  email: raphaele.preget@inrae.fr
  organization: INRAE, CEE-M, Univ. Montpellier, CNRS, INRAE, Institut Agro
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  givenname: Sophie
  orcidid: 0000-0003-2900-2117
  surname: Thoyer
  fullname: Thoyer, Sophie
  organization: INRAE, CEE-M, Univ. Montpellier, CNRS, INRAE, Institut Agro
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Issue 2
Keywords Payments for environmental services
Farmers
Behaviour
D03
Voluntary contribution to a public good
Q18
Social norms
payments for environmental services
behaviour
social norms
agri-environmental contracts
farmers
voluntary contribution to a public good
Language English
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PublicationDate 2021-02-01
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PublicationSubtitle The Official Journal of the European Association of Environmental and Resource Economists
PublicationTitle Environmental & resource economics
PublicationTitleAbbrev Environ Resource Econ
PublicationYear 2021
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Springer Nature B.V
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    fullname: A Lindbeck
SSID ssj0009746
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Snippet The economic literature on Payments for Environmental Services (PES) has studied extensively the behavioural factors that prevent farmers from signing PES...
This article analyses the role played by social norms in farmers’ decisions to enroll into an agri-environmental scheme (AES). First, it develops a simple...
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StartPage 287
SubjectTerms Agricultural policy
Conformity
Contracts
Economic models
Economic Policy
Economics
Economics and Finance
Environmental Economics
Environmental Law/Policy/Ecojustice
Environmental Management
Environmental services
Equilibrium
Farmers
Farms
Humanities and Social Sciences
Norms
Opportunity costs
Payments
Sensitivity
Social groups
Social norms
Subsidies
Utility functions
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  providerName: Springer Nature
Title Farmers Follow the Herd: A Theoretical Model on Social Norms and Payments for Environmental Services
URI https://link.springer.com/article/10.1007/s10640-020-00532-y
https://www.proquest.com/docview/2487163322
https://shs.hal.science/halshs-03060492
Volume 78
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