Reports from University of Angers Advance Knowledge in Environmental Economics (Adoption of Environment-friendly Agricultural Practices With Background Risk: Experimental Evidence)

2020 JUN 11 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- New research on Economics - Environmental Economics is the subject of a report. According to news reporting originating in Angers, France, by NewsRx journalists, research stated, “Agriculture is one of the economic sectors most exposed to exogenous risks such as climate hazards and price volatility on agricultural markets. Agricultural policies targeting the adoption of environment-friendly but potentially risk-increasing practices cannot ignore this challenge.”

Financial supporters for this research include Angers University, Alexander Von Humboldt foundation, ANR.

The news reporters obtained a quote from the research from the University of Angers, “Farmers have indeed to decide if they take the foreground risk associated with the adoption of environment-friendly practices, while simultaneously facing exogenous background risk beyond their control. Using a theoretical model and a public good experiment, we analyse the adoption of agri-environmental practices and the effect of agri-environmental subsidies in a context where risks are both foreground and background. While most of the literature on background risk focuses on its impact on individual decisions, we analyse the influence of background risk in a context of strategic uncertainty (contribution to a public good). The results highlight the potential synergies between greening the CAP and supporting risk management. We find that background risk discourages the adoption of green practices, although it affects all farmland independently from the farmer’s choice of practices (environment friendly or conventional).”

According to the news reporters, the research concluded: “An incentive payment per hectare of land farmed with green practices increases the adoption of risk-increasing practices but is significantly less effective in the presence of background risk.”

For more information on this research see: Adoption of Environment-friendly Agricultural Practices With Background Risk: Experimental Evidence. Environmental and Resource Economics, 2020;():. Environmental and Resource Economics can be contacted at: Springer, Van Godewijckstraat 30, 3311 Gz Dordrecht, Netherlands. (Springer - www.springer.com; Environmental and Resource Economics - http://www.springerlink.com/content/0924-6460/)

Our news correspondents report that additional information may be obtained by contacting M. Lefebvre, University of Angers, Granem 7456, F-49036 Angers, France. Additional authors for this research include E. Midler and P. Bontems.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1007/s10640-020-00431-2. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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