GREEN SUBSIDIES IN AGRICULTURE: ESTIMATING THE ADOPTION COSTS OF CONSERVATION TILLAGE FROM OBSERVED BEHAVIOR

Because of payoff uncertainties combined with risk aversion and/or real options, farmers may demand a premium in order to adopt conservation tillage practices, over and above the compensation for the expected profit losses (if any). We propose a method of directly estimating the financial incentives for adopting conservation tillage and distinguishing between the expected payoff and premium of adoption based on observed behavior. We find that the premium may play a significant role in farmers' adoption decisions.


Issue Date:
2003
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/18517
Total Pages:
24
Series Statement:
CARD Working Paper 01-WP 286 (Revised)




 Record created 2017-04-01, last modified 2017-04-04

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