Non-Monetary Motivations of Agro-Environmental Policies Adoption. A Causal Forest Approach

This paper investigates the non-monetary motivations of farmers’ adoption of agro-environmental policies. Unlike the monetary (income) motivations, non-monetary drivers can not be directly observed but can be identified from observational data within appropriate quasi-experimental designs. A theoretical justification of farmers’ choices is firstly formulated and a consequent natural experiment setting is derived. This latter admits heterogeneous, i.e. Individual, Treatment Effects (ITE) that, in turn, can be interpreted in terms of more targeted and tailored policy expenditure. A Causal Forest (CF) approach is adopted to estimate these ITEs for both the treated and not treated units. The approach is applied to two balanced panel samples of Italian FADN farms observed over the 2008-2018 period. Results show how heterogeneous the farmers’ response and the associated non-monetary motivations can be, thus pointing to space for a more efficient policy design