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How Much Green for the Buck? Estimating Additional and Windfall Effects of French Agro-Environmental Schemes by DID-Matching

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  • Chabé-Ferret, Sylvain
  • Subervie, Julie

Abstract

Agro-environmental schemes (AES), which pay farmers to adopt greener practices, are increasingly important components of environmental and agricultural policies both in the US and the EU. Here we study the French implementation of the EU AES program. We estimate additional and windfall effects of five AESs for a representative sample of individual farmers using Difference-In-Difference (DID) matching. We derive the statistical assumptions underlying DID-matching from a structural household model and we argue that the economics of the program make it likely that these assumptions hold in our data. We test the implications of the identifying assumptions, provide a lower bound using triple-difference matching, test for crossover effects and insert our estimates of both additionality and windfall effects into a cost-benefit framework. We find that the AESs promoting crop diversity have inserted one new crop into the rotation but on a small part of the cropped area. We also find that the AES subsidizing the planting of cover crops has increased cover crops by 10 hectares on the average recipient farm at the expense of almost 7 hectares of windfall effect. This AES does not appear to be cost effective. In contrast, we find that the AES subsidizing grass buffer strips could be socially efficient despite large windfall effects. We finally estimate that the AES subsidizing conversion to organic farming has low windfall effects and high additionality.

Suggested Citation

  • Chabé-Ferret, Sylvain & Subervie, Julie, 2012. "How Much Green for the Buck? Estimating Additional and Windfall Effects of French Agro-Environmental Schemes by DID-Matching," TSE Working Papers 12-357, Toulouse School of Economics (TSE).
  • Handle: RePEc:tse:wpaper:26568
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    Cited by:

    1. Laure Kuhfuss & Raphaële Préget & Sophie Thoyer & Nick Hanley & Philippe Le Coent & Mathieu Désolé, 2016. "Nudges, Social Norms, and Permanence in Agri-environmental Schemes," Land Economics, University of Wisconsin Press, vol. 92(4), pages 641-655.
    2. Laure Kuhfuss & Julie Subervie, 2015. "Do agri-environmental schemes help reduce herbicide use? Evidence from a natural experiment in France," Post-Print hal-01199067, HAL.
    3. Coralie Calvet & Philippe Le Coënt & Claude Napoleone & Fabien Quetier, 2017. "Challenges of achieving biodiversity offset outcomes through agri-environmental schemes: evidence from an empirical study in Southern France »," Working Papers 17-05, LAMETA, Universitiy of Montpellier.
    4. Chabé-Ferret, Sylvain, 2017. "Should We Combine Difference In Differences with Conditioning on Pre-Treatment Outcomes?," TSE Working Papers 17-824, Toulouse School of Economics (TSE).
    5. Cloé Garnache & Scott M. Swinton & Joseph A. Herriges & Frank Lupi & R. Jan Stevenson, 2016. "Solving the Phosphorus Pollution Puzzle: Synthesis and Directions for Future Research," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(5), pages 1334-1359.
    6. Marita Laukkanen & Céline Nauges, 2014. "Evaluating Greening Farm Policies: A Structural Model for Assessing Agri-environmental Subsidies," Land Economics, University of Wisconsin Press, vol. 90(3), pages 458-481.
    7. Gonzalez-Ramirez, Maria Jimena & Kling, Catherine L. & Arbuckle, J. Gordon Jr., 2015. "Cost-share Effectiveness in the Adoption of Cover Crops in Iowa," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205876, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    8. Esposti, Roberto, 2014. "The Impact of the 2005 CAP-First Pillar Reform as a Multivalued Treatment Effect -Alternative Estimation Approaches," 2014 Third Congress, June 25-27, 2014, Alghero, Italy 173005, Italian Association of Agricultural and Applied Economics (AIEAA).
    9. repec:eee:agisys:v:154:y:2017:i:c:p:34-44 is not listed on IDEAS
    10. Laure Kuhfuss & Julie Subervie, 2015. "Do European PES help reduce herbicide use ? Evidence from a natural experiment in France," Working Papers 15-02, LAMETA, Universitiy of Montpellier, revised Nov 2015.
    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. Woodward, Richard T. & Newburn, David A. & Mezzatesta, Mariano, 2016. "Additionality and reverse crowding out for pollution offsets in water quality trading," Ecological Economics, Elsevier, vol. 128(C), pages 224-231.
    13. repec:eee:ecolec:v:149:y:2018:i:c:p:202-211 is not listed on IDEAS
    14. Schwarz, Gerald & Wolff, Anne & Offermann, Frank & Osterburg, Bernhard & Aalders, Inge & Miller, David & Morrice, Jane & Vlahos, George & Smyrniotopoulou, Alexandra & Artell, Janne & Aakkula, Jyrki & , 2014. "ENVIEVAL Development and application of new methodological frameworks for the evaluation of environmental impacts of EU rural development programmes," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182933, European Association of Agricultural Economists.
    15. Bareille, François & Dupraz, Pierre, 2016. "Biodiversity productive effects in milk farms of western France: a multi-output primal system," 149th Seminar, October 27-28, 2016, Rennes, France 244774, European Association of Agricultural Economists.
    16. Mathilde Baudrier & Valentin Bellassen & Claudine Foucherot, 2015. "La précédente Politique Agricole Commune (2003-2013) a réduit les émissions agricoles françaises," Working Papers hal-01152980, HAL.
    17. Roberto ESPOSTI, 2014. "To match, not to match, how to match: Estimating the farm-level impact of the CAP-first pillar reform (or: How to Apply Treatment-Effect Econometrics when the Real World is;a Mess)," Working Papers 403, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    18. Esposti, Roberto, 2015. "To match, not to matchm how to match: Estimating the farm-level impact of the 2005 CAP-first pillar reform," 2015 Conference, August 9-14, 2015, Milan, Italy 211625, International Association of Agricultural Economists.

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