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Towards an Understanding of the Performance of Ambient Tax Mechanisms in the Field: Evidence from Upstate New York Dairy Farmers

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  • Jordan F. Suter
  • Christian A. Vossler

Abstract

Using a design characterized by heterogeneous firms and stochastic ambient pollution, this study explores how results from ambient tax experiments with student subjects translate to a richer field context with dairy farmers in Upstate New York. Results suggest that the ambient tax induces group-level compliance among students and farmers. However, relative to students, farmers operating "small" firms pollute less and farmers operating "large" firms tend to pollute more. Deviations from theory among farmers are tied to beliefs about the impacts of farming on water pollution, as well as knowledge of neighbors' pollution. This study highlights the importance of framed field experiments in the policy test-bedding process.

Suggested Citation

  • Jordan F. Suter & Christian A. Vossler, 2014. "Towards an Understanding of the Performance of Ambient Tax Mechanisms in the Field: Evidence from Upstate New York Dairy Farmers," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(1), pages 92-107.
  • Handle: RePEc:oup:ajagec:v:96:y:2014:i:1:p:92-107.
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    File URL: http://hdl.handle.net/10.1093/ajae/aat066
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    Citations

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    Cited by:

    1. Frans P. Vries & Nick Hanley, 2016. "Incentive-Based Policy Design for Pollution Control and Biodiversity Conservation: A Review," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(4), pages 687-702, April.
    2. Luc Behaghel & Karen Macours & Julie Subervie, 2018. "Can RCTs help improve the design of CAP," Working Papers hal-01974425, HAL.
    3. Otto, Steven & Poe, Gregory L. & Just, David R., 2017. "Formulating and Testing a New Conservation Auction Mechanism in an Experimental Setting," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258476, Agricultural and Applied Economics Association.
    4. Luc Behaghel & Karen Macours & Julie Subervie, 2019. "How can randomised controlled trials help improve the design of the common agricultural policy?," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 46(3), pages 473-493.
    5. Leah H. Palm-Forster & Paul J. Ferraro & Nicholas Janusch & Christian A. Vossler & Kent D. Messer, 2019. "Behavioral and Experimental Agri-Environmental Research: Methodological Challenges, Literature Gaps, and Recommendations," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(3), pages 719-742, July.
    6. Timothy N. Cason & Steven Y. Wu, 2019. "Subject Pools and Deception in Agricultural and Resource Economics Experiments," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(3), pages 743-758, July.
    7. Hamet Sarr & Mohamed Bchir & Francois Cochard & Anne Rozan, 2016. "Nonpoint source pollution: An experimental investigation of the Average Pigouvian Tax," Working Papers hal-01375078, HAL.
    8. Hamet SARR & Mohamed Ali BCHIR & François COCHARD & Anne ROZAN, 2016. "Nonpoint source pollution: An experimental investigation of the Average Pigouvian Tax," Working Papers 2016-05, CRESE.
    9. Zhaoyang Liu & Jintao Xu & Xiaojun Yang & Qin Tu & Nick Hanley & Andreas Kontoleon, 2019. "Performance of Agglomeration Bonuses in Conservation Auctions: Lessons from a Framed Field Experiment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(3), pages 843-869, July.
    10. Peth, Denise & Mußhoff, Oliver, 2018. "Comparing compliance behaviour of students and farmers: Implications for agricultural policy impact analysis," DARE Discussion Papers 1809, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).
    11. François Cochard & Julie Le Gallo & Laurent Franckx, 2015. "Regulation Of Pollution In The Laboratory: Random Inspections, Ambient Inspections, And Commitment Problems," Bulletin of Economic Research, Wiley Blackwell, vol. 67(S1), pages 40-73, December.

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