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How much green for the buck? Estimating additional and windfall effects of French agro-environmental schemes by DID-matching

Chabe-Ferret, Sylvain and Subervie, Julie (2013) How much green for the buck? Estimating additional and windfall effects of French agro-environmental schemes by DID-matching. Journal of Environmental Economics and Management, pp. 12-27.

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Document available online at: https://hal.archives-ouvertes.fr/hal-01019056


Summary

Agro-environmental schemes (AES), which pay farmers to adopt greener practices, are increasingly important components of environmental and agricultural policies both in the US and the EU. Here we study the French implementation of the EU AES program. We estimate additional and windfall effects of five AESs for a representative sample of individual farmers using difference-in-difference (DID) matching. We derive the statistical assumptions underlying DID-matching from a structural household model and we argue that the economics of the program make it likely that these assumptions hold in our data. We test the implications of the identifying assumptions, provide a lower bound using triple-difference matching, test for crossover effects and insert our estimates of both additionality and windfall effects into a cost-benefit framework. We find that the AESs promoting crop diversity have inserted one new crop into the rotation but on a small part of the cropped area. We also find that the AES subsidizing the planting of cover crops has increased cover crops by 10 ha on the average recipient farm at the expense of almost 7 ha of windfall effect. This AES does not appear to be cost effective. In contrast, we find that the AES subsidizing grass buffer strips could be socially efficient despite large windfall effects. We finally estimate that the AES subsidizing conversion to organic farming has low windfall effects and high additionality.


EPrint Type:Journal paper
Keywords:agro-environmental schemes (en), agricultural practices (en), crop diversity (en), cover crops (en), grass buffer strips (en), organic farming (en), windfall effects (en), treatment effects (en), difference in difference matching (en), additionality (en)
Subjects:"Organics" in general
Research affiliation: France > INRAe - Institut national de recherche pour l’agriculture, l’alimentation et l’environnement
ISSN:ISSN: 0095-0696
DOI:10.1016/j.jeem.2012.09.003
Project ID:HAL-INRAe
Deposited By: PENVERN, Servane
ID Code:41692
Deposited On:12 Aug 2021 10:37
Last Modified:12 Aug 2021 10:37
Document Language:English

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