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The regulation of non-point source pollution and risk preferences: An experimental approach


  • Camacho-Cuena, Eva
  • Requate, Till


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.

Suggested Citation

  • Camacho-Cuena, Eva & Requate, Till, 2012. "The regulation of non-point source pollution and risk preferences: An experimental approach," Ecological Economics, Elsevier, vol. 73(C), pages 179-187.
  • Handle: RePEc:eee:ecolec:v:73:y:2012:i:c:p:179-187
    DOI: 10.1016/j.ecolecon.2011.10.019

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    References listed on IDEAS

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    Cited by:

    1. repec:eee:jeeman:v:86:y:2017:i:c:p:48-67 is not listed on IDEAS
    2. Hongjun Dai & Tao Sun & Kun Zhang & Wen Guo, 2015. "Research on Rural Nonpoint Source Pollution in the Process of Urban-Rural Integration in the Economically-Developed Area in China Based on the Improved STIRPAT Model," Sustainability, MDPI, Open Access Journal, vol. 7(1), pages 1-12, January.
    3. Alfarano, Simone & Eva, Camacho & Josep, Domènech, 2010. "Estimation of a simple genetic algorithm applied to a laboratory experiment," MPRA Paper 24138, University Library of Munich, Germany.
    4. James Shortle & Richard D. Horan, 2013. "Policy Instruments for Water Quality Protection," Annual Review of Resource Economics, Annual Reviews, vol. 5(1), pages 111-138, June.

    More about this item


    Non-point source pollution; Environmental policy; Risk attitude; Economic experiments;

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects


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