Comparing effectiveness and return on investment of action- and results-based agri-environmental payments in Switzerland
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Date
2022-10
Publication Type
Journal Article
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yes
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Abstract
Agri-environmental schemes are an important policy tool to foster agricultural sustainability. We assess the effectiveness and return on investment of two different schemes designed to encourage biodiversity conservation in Switzerland: payments for actions and payments for results. Empirically, we exploit a major policy reform that created a natural experiment by abruptly and unevenly increasing both payments across farmers. Using difference in differences, we estimate the effect of the policy reform on farmers for whom only the action- or the results-based payments increased, as well as on those for whom both increased, compared to farmers for whom neither increased. Our findings are fourfold: First, higher payments increased the biodiversity conservation area. A payment raise by 1% increased conservation areas on average by 0.6% in the action based, and by 1% in the results-based scheme. Second, the combination of both schemes increased average effectiveness but also windfall gains. Third, using a benefit transfer approach, we estimate a positive return of investment for all payment increases. Finally, the estimated return on investment for the results-based payments is higher than for the action-based payments.
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published
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Book title
Journal / series
Volume
104 (5)
Pages / Article No.
1585 - 1604
Publisher
Wiley
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Edition / version
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Software
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Date collected
Date created
Subject
additionality; agri-environmental schemes; action based; biodiversity conservation; results based; return on investment; treatment effects; windfall effects
Organisational unit
09564 - Finger, Robert / Finger, Robert