A National-Level Economic Analysis of Conservation Reserve Program Participation: A Discrete Choice Approach

The decision to participate in a Government program can be viewed as a discrete choice problem, where a farmer will choose to sign up for the program if the expected utility of participating outweighs the expected utility of not participating. In this article, the probability of farmer participation in the Conservation Reserve Program (CRP) is modeled as a discrete choice problem and the model is estimated based on data for the entire United States. Results from the first three CRP signup periods indicate that farm tenure, farm size, land value, farmer age, erosion rate, and expected net returns with and without participation influence the probability of CRP participation. These results can be useful in evaluating how farmers might react to similar programs.