Agri-environmental policy and moral hazard under multiple sources of uncertainty

作者：Yano Yuki; Blandford David^*

来源：European Review of Agricultural Economics, 2011, 38(1): 141-155.

DOI：10.1093/erae/jbq049

• agri-environmental programmes
• moral hazard
• price and production uncertainty
• compliance
• risk-input relationships

Risk aversion has been considered a factor in mitigating the moral hazard problem in agri-environmental policy. If farmers face multiple sources of uncertainty, however, risk aversion could contribute to the problem. Focusing on a required reduction in the use of a potentially damaging input under an agri-environmental scheme, we address the implications of risk aversion for a farmer's decision on compliance. We show that risk aversion can indeed mitigate the moral hazard problem, but, if a required change in production practices increases output risk, the impact of risk aversion is ambiguous.

• 出版日期2011-3