Greening the common agricultural policy: a behavioural perspective and lab-in-the-field experiment in Germany

This study investigates the behavioral economic underpinnings of current policy approaches to integrate environmental objectives into the Common Agricultural Policy. We conduct an economic lab-in-the-field experiment with farmers in Germany. We analyze the impact of the following policy design features on farmers' decisions to adopt sustainable agricultural practices: (i) framing of the policy: whether farmers perceive themselves as being part of the problem or the solution, (ii) degree of control: mandatory vs. voluntary policy (iii) framing of incentives as either losses or gains. All policy designs tested result in a significant increase in hectares conserved compared to a baseline scenario without policy. Also behavioral factors do significantly affect farmers' behavior at the individual level. Only framing is found to significantly affect policy effectiveness.