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Addressing Participant Inattention in Federal Programs: A Field Experiment with The Conservation Reserve Program

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  • Steven Wallander
  • Paul Ferraro
  • Nathaniel Higgins

Abstract

Voluntary land conservation programs depend upon the willingness of land owners to participate. Since participation requires commitment to long-term contracts, most studies on participation focus on changes to the pecuniary incentives facing land owners. This study presents a large-scale field experiment within the USDA’s Conservation Reserve Program (CRP) that examines whether informational outreach, including behavioral nudges, could improve land owners’ willingness to participate. The experiment evaluates the impact of three types of reminder letters on the rate at which land is offered into the CRP. We find that for the most well-informed group, farms with expiring CRP contracts, the reminder letters did improve participation. We interpret this result as evidence of inattentive behavior. We do not detect any differences in the estimated treatment effects among the basic reminder letter and the letters augmented with peer comparisons and social norm messaging, nor do we detect any treatment effect among currently unenrolled farms. From a policy perspective, these results imply that the USDA can generate additional CRP offers among farms with expiring contracts at an average cost of $39 per additional offer. Assuming a twenty-five million acre program, reminder letters sent during every sign-up period would result in re-enrollment offers from an additional 420,000 acres. Using simulations based on offers from prior CRP sign-ups, we estimate that these additional offers in the CRP auction would reduce program costs. Depending on the year of simulation, the outreach effort achieves a benefit-cost ratio of between 20:1 and 90:1.

Suggested Citation

  • Steven Wallander & Paul Ferraro & Nathaniel Higgins, 2017. "Addressing Participant Inattention in Federal Programs: A Field Experiment with The Conservation Reserve Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(4), pages 914-931.
  • Handle: RePEc:oup:ajagec:v:99:y:2017:i:4:p:914-931.
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    File URL: http://hdl.handle.net/10.1093/ajae/aax023
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    Citations

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    Cited by:

    1. Czajkowski, Mikołaj & Zagórska, Katarzyna & Letki, Natalia & Tryjanowski, Piotr & Wąs, Adam, 2021. "Drivers of farmers’ willingness to adopt extensive farming practices in a globally important bird area," Land Use Policy, Elsevier, vol. 107(C).
    2. Sylvain Chabé-Ferret & Philippe Le Coent & Arnaud Reynaud & Julie Subervie & Daniel Lepercq, 2019. "Can we nudge farmers into saving water? Evidence from a randomised experiment," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 46(3), pages 393-416.
    3. Wallander, Steven & Hellerstein, Daniel M. & Johnsen, Reid, 2018. "Cost Effectiveness of Conservation Auctions Revisited: The Benefits of Information Rents," 2018 Annual Meeting, August 5-7, Washington, D.C. 274457, Agricultural and Applied Economics Association.
    4. Luc Behaghel & Karen Macours & Julie Subervie, 2018. "Can RCTs help improve the design of CAP," Working Papers hal-01974425, HAL.
    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. Shimada, Hideki, 2020. "Do monetary rewards for spatial coordination enhance participation in a forest incentive program?," Ecological Economics, Elsevier, vol. 177(C).
    7. Collin Weigel & Laura A. Paul & Paul J. Ferraro & Kent D. Messer, 2021. "Challenges in Recruiting U.S. Farmers for Policy‐Relevant Economic Field Experiments," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(2), pages 556-572, June.
    8. Benjamin Ouvrard & Raphaële Préget & Arnaud Reynaud & Laetitia Tuffery, 2020. "Nudging and Subsidizing Farmers to Foster Smart Water Meter Adoption," Working Papers hal-02958784, HAL.
    9. Karsyn Lamb & Kristiana Hansen & Christopher Bastian & Amy Nagler & Chian Jones Ritten, 2019. "Investigating Potential Impacts of Credit Failure Risk Mitigation on Habitat Exchange Outcomes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(3), pages 815-842, July.
    10. Mykel R. Taylor & Nathan P. Hendricks & Gabriel S. Sampson & Dillon Garr, 2021. "The Opportunity Cost of the Conservation Reserve Program: A Kansas Land Example," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(2), pages 849-865, June.
    11. Higgins, Nathaniel & Hellerstein, Daniel & Wallander, Steven & Lynch, Lori, 2017. "Economic Experiments for Policy Analysis and Program Design: A Guide for Agricultural Decisionmakers," Economic Research Report 262456, United States Department of Agriculture, Economic Research Service.
    12. Czap, Natalia V. & Czap, Hans J. & Banerjee, Simanti & Burbach, Mark E., 2019. "Encouraging farmers' participation in the Conservation Stewardship Program: A field experiment," Ecological Economics, Elsevier, vol. 161(C), pages 130-143.
    13. Janusch, Nicholas & Palm-Forster, Leah H. & Messer, Kent D. & Ferraro, Paul J., 2017. "Behavioral Insights for Agri-Environmental Program and Policy Design," 2018 Allied Social Sciences Association (ASSA) Annual Meeting, January 5-7, 2018, Philadelphia, Pennsylvania 266299, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    Land conservation; auction participation; outreach effects; field experiment; inattention; peer comparison;
    All these keywords.

    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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