| Registro completo |
| Provedor de dados: |
AgEcon
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| País: |
United States
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| Título: |
Adverse Selection in the Environmental Stewardship Scheme: Does the Higher Level Entry Scheme Design Reduce Adverse Selection?
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| Autores: |
Quillerou, Emmanuelle
Fraser, Rob W.
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| Data: |
2009-04-01
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| Ano: |
2009
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| Palavras-chave: |
Adverse selection
Agri-environment
Environmental Stewardship
Principal-agent
Contract
Environmental Economics and Policy
D78
D82
H44
Q18
Q58
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| Resumo: |
The Environmental Stewardship Scheme provides payments to farmers for the provision of environmental services based on agricultural foregone income. This creates a potential incentive compatibility problem which, combined with an information asymmetry on farm land heterogeneity, could lead to adverse selection of farmers into the scheme. However, the Higher Level Scheme (HLS) design includes some features that potentially reduce adverse selection. This paper studies the adverse selection problem of the HLS using a principal agent framework at the regional level. It is found that, at the regional level, the enrolment of more land from lower payment regions for a given budget constraint has led to a greater overall contracted area (and thus potential environmental benefit) which has had the effect of reducing the adverse selection problem. In addition, for landscape regions with the same payment rate (i.e. of the same agricultural value), differential weighting of the public demand for environmental goods and services provided by agriculture (measured by weighting an environmental benefit function by the distance to main cities) appears to be reflected into the regulator’s allocation of contracts, thereby also reducing the adverse selection problem.
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| Tipo: |
Conference Paper or Presentation
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| Idioma: |
Inglês
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| Identificador: |
http://purl.umn.edu/51068
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| Relação: |
Agricultural Economics Society>83rd Annual Conference, March 30 - April 1, 2009, Dublin, Ireland
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| Formato: |
10
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