Analysis of Agri-Environmental Payment Programs
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The chapter presents an approach for simultaneously estimating farmers’ decisions to accept incentive payments in return for adopting a bundle of environmentally benign best management practices. Using the results of a multinomial probit analysis of surveys of over 1,000 farmers facing five adoption decisions in a voluntary program, we show how the farmers’ perceptions of the desirability of various bundles change with the offer amounts and with which practices are offered in the bundle. We also demonstrate an estimator for the mean minimum willingness to accept for adoption of a practice conditional on the cost share offers for other practices.
Keywordsbest management practices EQIP incentive payments multinomial probit maximum simulated likelihood estimation simulated multivariate normal WTA
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