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Unintended Consequences of Environmental Policies: the Case of Set-aside and Agricultural Intensification
[Conséquences involontaires des politiques environnementales : le cas du gel des terres et de l'intensification de l'agriculture]

Author

Listed:
  • Raja Chakir

    (UMR PSAE - Paris-Saclay Applied Economics - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Alban Thomas

    (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

The objective of this paper is to evaluate the indirect impacts of a set-aside policy on the environment through crop intensification. We estimate a structural, multi-output model on a panel of French farmers from 2006 to 2010, accounting for multivariate selection (corner solutions) on crops and land use. We use a parametric and a semi-nonparametric (based on sieve estimation) version of a quasi-maximum likelihood (QML) estimator, compare their goodness of fit and parameter efficiency and check for closeness with a test for non-nested models. We then perform a simulation experiment based on elasticity estimates for set-aside area and input demand, to evaluate intensive margin effects of the set-aside policy. Results show that a set-aside subsidy can provide farmers with incentives to intensify their production, leading to potential adverse environmental effects.

Suggested Citation

  • Raja Chakir & Alban Thomas, 2022. "Unintended Consequences of Environmental Policies: the Case of Set-aside and Agricultural Intensification [Conséquences involontaires des politiques environnementales : le cas du gel des terres et ," Post-Print hal-03550528, HAL.
  • Handle: RePEc:hal:journl:hal-03550528
    DOI: 10.1007/s10666-021-09815-0
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    Cited by:

    1. Yuanxin Li & Xinmiao Zhou & Huihong Liu & Jia Wu, 2024. "Incentive or Barrier: Evidence from Environmental Policy and Corporate Sustainability in China," Sustainability, MDPI, vol. 16(24), pages 1-34, December.
    2. Katarzyna Leśniewska-Napierała & Tomasz Napierała & Marta Nalej, 2024. "Geographical Variability of Set-Aside in Poland: Environmental and Anthropogenic Impacts on the Implementation of Complementary EU Instrument," Sustainability, MDPI, vol. 16(24), pages 1-23, December.
    3. Wimmer, Stefan & Stetter, Christian & Schmitt, Jonas & Ringer, Robert, 2022. "Farm-level responses to weather trends," 96th Annual Conference, April 4-6, 2022, K U Leuven, Belgium 321221, Agricultural Economics Society - AES.
    4. Thierry Brunelle & Raja Chakir & Alain Carpentier & Bruno Dorin & Daniel Goll & Nicolas Guilpart & Federico Maggi & David Makowski & Thomas Nesme & Jutta Roosen & Fiona Tang, 2024. "Reducing chemical inputs in agriculture requires a system change [La réduction des intrants chimiques dans l'agriculture nécessite un changement de système]," Post-Print hal-04644219, HAL.

    More about this item

    Keywords

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    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models

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