A Panel Data Random Effects Model of Agri-Environment Programme Participation

Previous studies that have attempted to model the participation decision of farmers in agrienvironmental schemes have used a static framework where it was not possible to examine changes in the participation decision of farmers over time. This is rectified in this paper by utilising an 11 year panel that contains information on approximately 1,100 farmers for each year. The structure of this data set allows us to employ pooled, fixed and random effects panel data logit models that take into account changes in the participation decision of farmers over time rather than simply examining the participation decision at just one point in time. The results point to the fact that systems of farming that are more extensive and less environmentally degrading remain those most likely to participate in the Rural Environmental Protection Scheme (REPS) leading us to question the efficacy of the scheme.