IDEAS home Printed from https://ideas.repec.org/p/ags/assa18/266307.html
   My bibliography  Save this paper

Farmers and Habits: The Challenge of Identifying the Sources of Persistence in Tillage Decisions

Author

Listed:
  • Wallander, Steven
  • Bowman, Maria
  • Beeson, Peter
  • Claassen, Roger

Abstract

A number of government programs, including USDA conservation programs, provide financial incentives to entice changes in behavior. An important question for these programs is whether temporary payments can lead to persistent behavioral changes. Over the past 20 years, the USDA Environmental Quality Incentives Program (EQIP) has provided more than $250 million to farmers adopting no-till crop production. In contrast to conventional tillage, which turns over the soil prior to planting, no-till can produce a number of environmental goods such as soil carbon sequestration, especially if farmers adopt no-till continuously for a long time period. This study examines whether temporary no-till payments result in persistent adoption of no-till beyond the term of conservation contracts. In the first part of our analysis, we examine field-level survey data, model no-till adoption as a second-order Markov process, and establish that in general there is considerable persistence in farmers’ tillage decisions. In the second part of our analysis, we examine a unique dataset of satellite-based estimates of field-level residue estimates in the Northern High Plains and examine changes in residue before, during, and after enrollment in EQIP. We conclude by discussing the potential implications of persistence for program outcomes as well as the challenges in identifying the mechanisms driving persistence.

Suggested Citation

  • Wallander, Steven & Bowman, Maria & Beeson, Peter & Claassen, Roger, 2017. "Farmers and Habits: The Challenge of Identifying the Sources of Persistence in Tillage Decisions," 2018 Allied Social Sciences Association (ASSA) Annual Meeting, January 5-7, 2018, Philadelphia, Pennsylvania 266307, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:assa18:266307
    DOI: 10.22004/ag.econ.266307
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/266307/files/Wallander%2C%20Bowman%2C%20Beeson%20%26%20Claassen%20Full%20Manuscript%20to%20AgEcon.pdf
    Download Restriction: no

    File URL: https://ageconsearch.umn.edu/record/266307/files/Wallander%2C%20Bowman%2C%20Beeson%20%26%20Claassen%20Full%20Manuscript%20to%20AgEcon.pdf?subformat=pdfa
    Download Restriction: no

    References listed on IDEAS

    as
    1. Michael P. Keane, 2013. "Panel data discrete choice models of consumer demand," Economics Papers 2013-W08, Economics Group, Nuffield College, University of Oxford.
    2. Andrea Pufahl & Christoph R. Weiss, 2009. "Evaluating the effects of farm programmes: results from propensity score matching," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 36(1), pages 79-101, March.
    3. Feng, Hongli & Kurkalova, Lyubov A. & Kling, Catherine L. & Gassman, Philip W., 2006. "Environmental conservation in agriculture: Land retirement vs. changing practices on working land," Journal of Environmental Economics and Management, Elsevier, vol. 52(2), pages 600-614, September.
    4. Tran, Dat & Kurkalova, Lyubov, 2016. "Dynamic modeling of bundled tillage-crop choices: impact of soil erodibility on the interactions between continuous conservation tillage and crop rotations in Iowa," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235831, Agricultural and Applied Economics Association.
    5. Aurbacher, Joachim & Dabbert, Stephan, 2011. "Generating crop sequences in land-use models using maximum entropy and Markov chains," Agricultural Systems, Elsevier, vol. 104(6), pages 470-479, July.
    6. Lyubov Kurkalova & Catherine Kling & Jinhua Zhao, 2006. "Green Subsidies in Agriculture: Estimating the Adoption Costs of Conservation Tillage from Observed Behavior," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 54(2), pages 247-267, June.
    7. Meredith J. Soule & Abebayehu Tegene & Keith D. Wiebe, 2000. "Land Tenure and the Adoption of Conservation Practices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 993-1005.
    8. Ding, Ya & Schoengold, Karina & Tadesse, Tsegaye, 2009. "The Impact of Weather Extremes on Agricultural Production Methods: Does Drought Increase Adoption of Conservation Tillage Practices?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 34(3), pages 1-17, December.
    9. Adamowicz, Wiktor L., 1994. "Habit Formation And Variety Seeking In A Discrete Choice Model Of Recreation Demand," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 19(1), pages 1-13, July.
    10. Wang, Haoying & Ortiz-Bobea, Ariel & Chonabayashi, Shun, 2015. "Adaptation to Climate Change through Crop Choice: A High Resolution Analysis," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205840, Agricultural and Applied Economics Association.
    11. Foster, Andrew D & Rosenzweig, Mark R, 1995. "Learning by Doing and Learning from Others: Human Capital and Technical Change in Agriculture," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1176-1209, December.
    12. Karen E. Dynan, 2000. "Habit Formation in Consumer Preferences: Evidence from Panel Data," American Economic Review, American Economic Association, vol. 90(3), pages 391-406, June.
    13. Wade, Tara & Claassen, Roger, 2015. "Modeling No-Tillage Adoption by Corn and Soybean Producers: Insights into Sustained Adoption," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 204957, Agricultural and Applied Economics Association.
    14. Wade, Tara & Claassen, Roger & Wallander, Steven, 2015. "Conservation-Practice Adoption Rates Vary Widely by Crop and Region," Economic Information Bulletin 262111, United States Department of Agriculture, Economic Research Service.
    15. Mariano Mezzatesta & David A. Newburn & Richard T. Woodward, 2013. "Additionality and the Adoption of Farm Conservation Practices," Land Economics, University of Wisconsin Press, vol. 89(4), pages 722-742.
    16. Tülin Erdem, 1996. "A Dynamic Analysis of Market Structure Based on Panel Data," Marketing Science, INFORMS, vol. 15(4), pages 359-378.
    17. Labeaga, Jose M., 1999. "A double-hurdle rational addiction model with heterogeneity: Estimating the demand for tobacco," Journal of Econometrics, Elsevier, vol. 93(1), pages 49-72, November.
    18. Wade, Tara & Pailler, Sharon & Claassen, Roger L., 2017. "Modeling No-Tillage Adoption by Corn and Soybean Producers: A Binary Panel Approach," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258556, Agricultural and Applied Economics Association.
    19. Wade, Tara & Claassen, Roger, 2017. "Modeling No-Till Adoption By Corn And Soybean Producers: Insights Into Sustained Adoption," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 49(2), pages 186-210, May.
    20. Pollak, Robert A, 1970. "Habit Formation and Dynamic Demand Functions," Journal of Political Economy, University of Chicago Press, vol. 78(4), pages 745-763, Part I Ju.
    21. Ji, Yongjie & Rabotyagov, sergey & Valcu-Lisman, Adriana, 2015. "Estimating Adoption of Cover Crops Using Preferences Revealed by a Dynamic Crop Choice Model," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205799, Agricultural and Applied Economics Association.
    22. Allen M. Featherstone & Barry K. Goodwin, 1993. "Factors Influencing a Farmer's Decision to Invest in Long-Term Conservation Improvements," Land Economics, University of Wisconsin Press, vol. 69(1), pages 67-81.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. David J. Pannell & Roger Claassen, 2020. "The Roles of Adoption and Behavior Change in Agricultural Policy," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(1), pages 31-41, March.
    2. Wade, Tara & Kurkalova, Lyubov & Secchi, Silvia, 2016. "Modeling Field-Level Conservation Tillage Adoption with Aggregate Choice Data," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(2), May.
    3. Claassen, Roger & Bowman, Maria & McFadden, Jonathan & Smith, David & Wallander, Steven, 2018. "Tillage Intensity and Conservation Cropping in the United States," Economic Information Bulletin 277566, United States Department of Agriculture, Economic Research Service.
    4. Wallander, Steven & Bowman, Maria S. & Claassen, Roger L., 2017. "Temporary Subsidies and Persistent Behavior: Evidence from Conservation Tillage," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 259148, Agricultural and Applied Economics Association.
    5. Claassen, Roger & Duquette, Eric, 2012. "Additionality in U.S. Agricultural Conservation Programs A Preliminary Analysis of New Data," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124721, Agricultural and Applied Economics Association.
    6. Banerjee, Swagata (Ban) & Martin, Steven W. & Roberts, Roland K. & Larson, James A. & Hogan, Robert J., Jr. & Johnson, Jason L. & Paxton, Kenneth W. & Reeves, Jeanne M., 2007. "Adoption of Conservation-Tillage Practices in Cotton Production," 2007 Annual Meeting, February 4-7, 2007, Mobile, Alabama 34842, Southern Agricultural Economics Association.
    7. Thunström, Linda, 2008. "Food Consumption, Paternalism and Economic Policy," Umeå Economic Studies 739, Umeå University, Department of Economics.
    8. Wade, Tara & Kurkalova, Lyubov A. & Secchi, Silvia, 2012. "Using the logit model with aggregated choice data in estimation of Iowa corn farmers’ conservation tillage subsidies," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124974, Agricultural and Applied Economics Association.
    9. Elizabeth Canales & Jason S. Bergtold & Jeffery R. Williams, 2020. "Conservation practice complementarity and timing of on‐farm adoption," Agricultural Economics, International Association of Agricultural Economists, vol. 51(5), pages 777-792, September.
    10. Yi, DongGyu, 2014. "Three studies on environmental valuation," ISU General Staff Papers 201401010800005065, Iowa State University, Department of Economics.
    11. Claassen, Roger & Duquette, Eric & Horowitz, John & Kohei, Ueda, 2014. "Additionality in U.S. Agricultural Conservation and Regulatory Offset Programs," Economic Research Report 180414, United States Department of Agriculture, Economic Research Service.
    12. Linda Thunström, 2010. "Preference Heterogeneity and Habit Persistence: The Case of Breakfast Cereal Consumption," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(1), pages 76-96, February.
    13. Rosenberg, Andrew B. & Wallander, Steven, 2020. "Conservation Practice Adoption and On-field Resource Concerns," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304563, Agricultural and Applied Economics Association.
    14. Badi H. Baltagi & Ingo Geishecker, 2006. "Rational alcohol addiction: evidence from the Russian longitudinal monitoring survey," Health Economics, John Wiley & Sons, Ltd., vol. 15(9), pages 893-914, September.
    15. Naveen Adusumilli & Rowell Dikitanan & Hua Wang, 2019. "Effect of Cost-Sharing Federal Programs on Adoption of Water Conservation Practices: Results from Propensity Score Matching Approach," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 6(01), pages 1-16, July.
    16. Gerelt Tserenjigmid, 0. "On the characterization of linear habit formation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 0, pages 1-45.
    17. Caroline Roussy & Aude Ridier & Karim Chaïb, 2014. "Adoption d’innovations par les agriculteurs : rôle des perceptions et des préférences," Post-Print hal-01123427, HAL.
    18. Giovanopoulou, Eirini & Nastis, Stefanos A. & Papanagiotou, Evagelos, 2011. "Modeling farmer participation in agri-environmental nitrate pollution reducing schemes," Ecological Economics, Elsevier, vol. 70(11), pages 2175-2180, September.
    19. Bergtold, Jason S. & Duffy, Patricia A. & Hite, Diane & Raper, Randy L., 2008. "Demographic and Management Factors Affecting the Perceived Benefit of Winter Cover Crops in the Southeast," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6424, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    20. Driscoll, John C. & Holden, Steinar, 2014. "Behavioral economics and macroeconomic models," Journal of Macroeconomics, Elsevier, vol. 41(C), pages 133-147.

    More about this item

    Keywords

    Agricultural and Food Policy; Environmental Economics and Policy; Land Economics/Use;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:assa18:266307. 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: (AgEcon Search). General contact details of provider: http://edirc.repec.org/data/aaeaaea.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.