Moral Hazard and Risk Management in Agri-environmental Policy
This paper develops the key finding of Hogan, Ozanne and Colman (2000) that risk aversion among farmers ameliorates the moral hazard problem in relation to agri-environmental policy compliance. It is shown that risk averse farmers who face uncertainty in their production income are more likely to comply with such a policy as a means of risk management. In addition, it is shown that a principal who has control over both the level of monitoring and the size of penalty if detected can reduce non-compliance by adjustments to these instruments which increase the variance of farmers’ income but leave the expected penalty unchanged. It is concluded that risk management by both principals and agents has the potential to diminish the moral hazard problem, especially given proposed developments in agri-environmental policy in the European Union.
(This abstract was borrowed from another version of this item.)
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 53 (2002)
Issue (Month): 3 ()
|Contact details of provider:|| Web page: http://www.blackwellpublishing.com/journal.asp?ref=0021-857X|
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=0021-857X|
References listed on IDEAS
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.:
- C. Choe & I. Fraser, 1998. "A Note on Imperfect Monitoring of Agri-Environmental Policy," Journal of Agricultural Economics, Wiley Blackwell, vol. 49(2), pages 250-258.
- Peter Bardsley & M. Harris, 1987.
"An Approach To The Econometric Estimation Of Attitudes To Risk In Agriculture,"
Australian Journal of Agricultural and Resource Economics,
Australian Agricultural and Resource Economics Society, vol. 31(2), pages 112-126, 08.
- Bardsley, Peter & Harris, Michael, 1987. "An Approach To The Econometric Estimation Of Attitudes To Risk In Agriculture," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 31(02), August.
- repec:ltr:wpaper:1997.08 is not listed on IDEAS
- Chongwoo Choe & Iain Fraser, 1997.
"Compliance Monitoring and Agri-Environmental Policy,"
1997.08, School of Economics, La Trobe University.
- Chongwoo Choe & Iain Fraser, 1999. "Compliance Monitoring and Agri-Environmental Policy," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(3), pages 468-487.
- Fraser, Rob W., 2001.
"Using Principal-Agent Theory to Deal with Output Slippage in the European Union Set-Aside Policy,"
2001 Conference (45th), January 23-25, 2001, Adelaide
125632, Australian Agricultural and Resource Economics Society.
- Rob Fraser, 2001. "Using Principal-Agent Theory to Deal with Output Slippage in the European Union Set-Aside Policy," Journal of Agricultural Economics, Wiley Blackwell, vol. 52(2), pages 29-41.
- Rob Fraser & Hild Rygnestad, 1999. "An Assessment of the Impact of Implementing the European Commission's "Agenda 2000" Cereal Proposals for Specialist Wheatgrowers in Denmark," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(2), pages 328-335.
- Andrew Moxey & Ben White & Adam Ozanne, 1999. "Efficient Contract Design for Agri-Environment Policy," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(2), pages 187-202.
- Bourgeon, Jean-Marc & Jayet, Pierre-Alain & Picard, Pierre, 1995.
"An incentive approach to land set-aside programs,"
European Economic Review,
Elsevier, vol. 39(8), pages 1487-1509, October.
When requesting a correction, please mention this item's handle: RePEc:bla:jageco:v:53:y:2002:i:3:p:475-487. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
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.