To Cheat or Not To Cheat: Moral Hazard and Agri-environmental Policy

This Address examines the moral hazard problem in agri‐environmental policy. It begins with a theoretical analysis of moral hazard in this context, including the identification of eight potential causes of cheating behaviour among farmers. But is cheating behaviour among farmers actually a problem f...

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Bibliographic Details
Published in:Journal of agricultural economics 2013-09, Vol.64 (3), p.527-536
Main Author: Fraser, Rob
Format: Article
Language:English
Subjects:
agri-environmental policy
Economic models
Environmental policy
Moral hazard
Studies
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Summary:This Address examines the moral hazard problem in agri‐environmental policy. It begins with a theoretical analysis of moral hazard in this context, including the identification of eight potential causes of cheating behaviour among farmers. But is cheating behaviour among farmers actually a problem for agri‐environmental policy? And if it is, which are the statistically significant causes of concern? The answer seems to be: “we don't know” as there are currently no empirical analyses of the moral hazard problem and its causes in agri‐environmental policy. On this basis I analyse a set of policy solutions – to a problem for which we have no evidence of its causes or extent!
ISSN:0021-857X
1477-9552
DOI:10.1111/1477-9552.12035