The objective of this paper is to evaluate alternative policy design options for agri-environmental schemes. The methodology relies on a simulation model of agri-environmental practices adoption based on a real option approach, including transaction costs and simulating different price expectations by farmers. Transaction costs included are both ex-ante and ex-post. Policy alternatives are represented by a different level of payment and a different dynamic of such payments over time. The model is applied to a case study in the Province of Ferrara (Italy). Results show that transaction costs and expectations play an important role in the adoption of agri-environmental practices, as well as expectations, particularly in the present scenarios of change. The option to wait for adoption is a relevant alternative from the point of view of farmers, while, on the other hand, hold up phenomena may allow relevant savings in payments. Altogether the present policy time framework (7 years) appears insufficient for an accurate incentive design, particularly for actions with a relevant investment component and for decisions requiring to take into account long term income opportunities.
Incentivi, aspettative e timing nel disegno delle politiche agro-ambientali: un’analisi empirica in Emilia Romagna
BARTOLINI, FABIO;
2008-01-01
Abstract
The objective of this paper is to evaluate alternative policy design options for agri-environmental schemes. The methodology relies on a simulation model of agri-environmental practices adoption based on a real option approach, including transaction costs and simulating different price expectations by farmers. Transaction costs included are both ex-ante and ex-post. Policy alternatives are represented by a different level of payment and a different dynamic of such payments over time. The model is applied to a case study in the Province of Ferrara (Italy). Results show that transaction costs and expectations play an important role in the adoption of agri-environmental practices, as well as expectations, particularly in the present scenarios of change. The option to wait for adoption is a relevant alternative from the point of view of farmers, while, on the other hand, hold up phenomena may allow relevant savings in payments. Altogether the present policy time framework (7 years) appears insufficient for an accurate incentive design, particularly for actions with a relevant investment component and for decisions requiring to take into account long term income opportunities.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
