Simulating the Effects of a Green Payment Program on the Diffusion Rate of a Conservation Technology
AbstractThe decision to adopt a potentially profitable but unfamiliar conservation technology is cast in a multi-period Bayesian framework. Specifically, dairy farmers who are both risk-averse and susceptible to peer group influence progressively learn about the true impact of adopting reduced phosphorus dairy diets on their income distributions as they repeatedly experiment with this new technology. Empirically calibrated simulations are used to examine the effects of a voluntary green payment program on the rate of technological diffusion. Results suggest that (a) green payments can accelerate learning and produce significant, permanent changes in behavior relatively quickly and for a reasonable cost; (b) shorter contracts offering larger incentives may be more cost-effective when learning plays an important role in behavioral change; and (c) unknown prior beliefs can reduce the efficacy of a green payment program, implying efforts to verify these priors or to ensure against them by increasing the payment level may be worthwhile.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Northeastern Agricultural and Resource Economics Association in its journal Agricultural and Resource Economics Review.
Volume (Year): 33 (2004)
Issue (Month): 1 (April)
Environmental Economics and Policy;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Golan, Amos & Judge, George G. & Miller, Douglas, 1996. "Maximum Entropy Econometrics," Staff General Research Papers 1488, Iowa State University, Department of Economics.
- Nagubadi, Venkatarao & McNamara, Kevin T. & Hoover, William L. & Mills, Walter L., Jr., 1996. "Program Participation Behvaior Of Nonindustrial Forest Landowners: A Probit Analysis," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 28(02), December.
- Manski, Charles F., 1993. "Dynamic choice in social settings : Learning from the experiences of others," Journal of Econometrics, Elsevier, vol. 58(1-2), pages 121-136, July.
- Golan, Amos & Judge, George & Karp, Larry, 1996. "A maximum entropy approach to estimation and inference in dynamic models or Counting fish in the sea using maximum entropy," Journal of Economic Dynamics and Control, Elsevier, vol. 20(4), pages 559-582, April.
- Khanna, Madhu & Isik, Murat & Zilberman, David, 2002. "Cost-effectiveness of alternative green payment policies for conservation technology adoption with heterogeneous land quality," Agricultural Economics, Blackwell, vol. 27(2), pages 157-174, August.
- Jaffe Adam B. & Stavins Robert N., 1995. "Dynamic Incentives of Environmental Regulations: The Effects of Alternative Policy Instruments on Technology Diffusion," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages S43-S63, November.
- David Zilberman & Doug Parker, 1996. "Explaining Irrigation Technology Choices: A Microparameter Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(4), pages 1064-1072.
- Joseph C. Cooper & Russ W. Keim, 1996.
"Incentive Payments to Encourage Farmer Adoption of Water Quality Protection Practices,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 78(1), pages 54-64.
- Cooper, Joseph C. & Keim, Russ, 1996. "Incentive payments to encourage farmer adoption of water quality protection practices," MPRA Paper 24779, University Library of Munich, Germany.
- Isik, Murat & Khanna, Madhu, 2002.
"Stochastic Technology, Risk Preferences And Adoption Of Site-Specific Technologies,"
2002 Annual meeting, July 28-31, Long Beach, CA
19858, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Murat Isik & Madhu Khanna, 2003. "Stochastic Technology, Risk Preferences, and Adoption of Site-Specific Technologies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 305-317.
- Fernandez, Linda, 1997. "Estimation of Wastewater Treatment Objectives through Maximum Entropy," Journal of Environmental Economics and Management, Elsevier, vol. 32(3), pages 293-308, March.
- Allan Shampine, 1998. "Compensating for Information Externalities in Technology Diffusion Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(2), pages 337-346.
- Stoneman, P, 1981. "Intra-Firm Diffusion, Bayesian Learning and Profitability," Economic Journal, Royal Economic Society, vol. 91(362), pages 375-88, June.
- Whitten, Stuart M. & Reeson, Andrew & Windle, Jill & Rolfe, John, 2008. "Barriers to and Opportunities for Increasing Participation in Conservation Auctions," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 5973, Australian Agricultural and Resource Economics Society.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.