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Green Subsidies In Agriculture: Estimating The Adoption Costs Of Conservation Tillage From Observed Behavior

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  • Kurkalova, Lyubov A.
  • Kling, Catherine L.
  • Zhao, Jinhua

Abstract

Because of payoff uncertainties combined with risk aversion and/or real options, farmers may demand a premium in order to adopt conservation tillage practices, over and above the compensation for the expected profit losses (if any). We propose a method of directly estimating the financial incentives for adopting conservation tillage and distinguishing between the expected payoff and premium of adoption based on observed behavior. We find that the premium may play a significant role in farmers' adoption decisions.

Suggested Citation

  • Kurkalova, Lyubov A. & Kling, Catherine L. & Zhao, Jinhua, 2003. "Green Subsidies In Agriculture: Estimating The Adoption Costs Of Conservation Tillage From Observed Behavior," Hebrew University of Jerusalem Archive 18517, Hebrew University of Jerusalem.
    • Handle: RePEc:ags:hebarc:18517
    DOI: 10.22004/ag.econ.18517
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