The regulation of non-point source pollution and risk preferences: An experimental approach
Many environmental problems, notably arising from agriculture, can be classified as non-point source pollution problems. In this paper we present results of an experimental study on the performance of three mechanisms designed to deal with such problems: collective fining, random fining, and a tax-s...
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| Published in | Ecological economics Vol. 73; pp. 179 - 187 |
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| Main Authors | , |
| Format | Journal Article |
| Language | English |
| Published |
Elsevier B.V
01.01.2012
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| Online Access | Get full text |
| ISSN | 0921-8009 1873-6106 |
| DOI | 10.1016/j.ecolecon.2011.10.019 |
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| Abstract | Many environmental problems, notably arising from agriculture, can be classified as non-point source pollution problems. In this paper we present results of an experimental study on the performance of three mechanisms designed to deal with such problems: collective fining, random fining, and a tax-subsidy scheme. We find that the fining schemes induce under-abatement, a feature being enforced with experience. We further elicit the participants' risk attitude and show that the performance of collective fining is not affected by the subjects' risk preferences. Under a system based on random fining the performance of the mechanism worsens in the presence of risk seeking subjects. However, coordination on over-abatement under the tax-subsidy can be alleviated if subjects are risk averse. |
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| AbstractList | Many environmental problems, notably arising from agriculture, can be classified as non-point source pollution problems. In this paper we present results of an experimental study on the performance of three mechanisms designed to deal with such problems: collective fining, random fining, and a tax-subsidy scheme. We find that the fining schemes induce under-abatement, a feature being enforced with experience. We further elicit the participants' risk attitude and show that the performance of collective fining is not affected by the subjects' risk preferences. Under a system based on random fining the performance of the mechanism worsens in the presence of risk seeking subjects. However, coordination on over-abatement under the tax-subsidy can be alleviated if subjects are risk averse. [Copyright Elsevier B.V.] Many environmental problems, notably arising from agriculture, can be classified as non-point source pollution problems. In this paper we present results of an experimental study on the performance of three mechanisms designed to deal with such problems: collective fining, random fining, and a tax-subsidy scheme. We find that the fining schemes induce under-abatement, a feature being enforced with experience. We further elicit the participants' risk attitude and show that the performance of collective fining is not affected by the subjects' risk preferences. Under a system based on random fining the performance of the mechanism worsens in the presence of risk seeking subjects. However, coordination on over-abatement under the tax-subsidy can be alleviated if subjects are risk averse. Many environmental problems, notably arising from agriculture, can be classified as non-point source pollution problems. In this paper we present results of an experimental study on the performance of three mechanisms designed to deal with such problems: collective fining, random fining, and a tax-subsidy scheme. We find that the fining schemes induce under-abatement, a feature being enforced with experience. We further elicit the participants' risk attitude and show that the performance of collective fining is not affected by the subjects' risk preferences. Under a system based on random fining the performance of the mechanism worsens in the presence of risk seeking subjects. However, coordination on over-abatement under the tax-subsidy can be alleviated if subjects are risk averse. All rights reserved, Elsevier |
| Author | Requate, Till Camacho-Cuena, Eva |
| Author_xml | – sequence: 1 givenname: Eva surname: Camacho-Cuena fullname: Camacho-Cuena, Eva email: camacho@eco.uji.es organization: Department of Economics, Universitat Jaume I, Castellón, Spain – sequence: 2 givenname: Till surname: Requate fullname: Requate, Till organization: Department of Economics, University of Kiel and Kiel Institute for the World Economy, Kiel, Germany |
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| Keywords | Non-point source pollution Environmental policy Risk attitude C9 Economic experiments Q52 |
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| Snippet | Many environmental problems, notably arising from agriculture, can be classified as non-point source pollution problems. In this paper we present results of an... |
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| StartPage | 179 |
| SubjectTerms | Agriculture Economic experiments economics Environmental policy Experiments Non-point source pollution nonpoint source pollution Pollution pollution control Regulation Risk Risk attitude |
| Title | The regulation of non-point source pollution and risk preferences: An experimental approach |
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