Farmers Follow the Herd : A Theoretical Model on Social Norms and Payments for Environmental Services

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Cite as:

Le Coent P, Préget R, Thoyer S (2021) Farmers Follow the Herd : A Theoretical Model on Social Norms and Payments for Environmental Services. Environ Resour Econ 20.

Found at

https://doi.org/10.1007/s10640-020-00532-y

Abstract

The economic literature on Payments for Environmental Services (PES) has studied exten- sively the behavioural factors that prevent farmers from signing PES contracts, even when the payments exceed the expected opportunity costs. This article provides a theoretical model of the role played by the interplay of descriptive and injunctive social norms in farmers' decisions. When they choose to contribute voluntarily to an environmental public good, farmers may be driven by descriptive norms akin to conformity (do as the majority of their peers) as well as by injunctive norms (in line with what society expects them to do), which are the equivalent of a social injunction to act in favour of the environment. The interactions between these two social norms can yield multiple equilibria, depending on the relative weight of the descriptive norm (sensitivity to conformism) and of the injunc- tive norm (sensitivity to moral pressure) in the utility functions of farmers. More generally, our model can explain why social groups are sometimes trapped in low public-good-con- tribution equilibria, even when public subsidies to contributors are high. We make policy recommendations to help reach higher contribution equilibria, with a specific focus on the farm policy context.

Type:

Tools:

Experimental Economics

Countries:

France