Hidden action, risk aversion and variable fines in agri-environmental schemes

This note analyses the design of agri-environmental schemes for risk-averse producers whose input usage is only observable by costly monitoring. The scheme penalises producers in proportion to input use in excess of a quota. A striking result is that if the scheme is designed in such a way that producers always comply with the quota, risk aversion is not relevant in determining the level of input use.

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Year of publication:	2008
Authors:	Ozanne, Adam ; White, Benedict
Published in:	Australian Journal of Agricultural and Resource Economics. - Australian Agricultural and Resource Economics Society - AARES. - Vol. 52.2008, 2
Publisher:	Australian Agricultural and Resource Economics Society - AARES
Subject:	agri-environmental policy \| monitoring \| risk aversion \| Environmental Economics and Policy \| Risk and Uncertainty

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Extent:	application/pdf
Type of publication:	Article
Source:	RePEc - Research Papers in Economics

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