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85th Annual Conference, April 18-20, 2011, Warwick University, Coventry, UK >
Please use this identifier to cite or link to this item:
http://purl.umn.edu/108795
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| Title: | Moral Hazard, Targeting and Contract Duration in Agri-Environmental Policy |
| Authors: | Fraser, Rob W. |
| Authors (Email): | Fraser, Rob (r.w.fraser@kent.ac.uk) |
| Keywords: | Moral Hazard
Contract Duration
Agri-Environmental Policy
Targeting |
| JEL Codes: | Q15
Q18
Q58 |
| Issue Date: | 2011-04 |
| Abstract: | This paper extends the multi-period agri-environmental contract model of Fraser (2004) so that it contains a more realistic specification of the inter-temporal penalties for non-compliance, and therefore of the inter-temporal moral hazard problem in agri-environmental policy design. On this basis it is shown that a farmer will have an unambiguous preference for cheating early over cheating late in the contract period based on differences in the expected cost of compliance. It is then shown how the principal can make use of this unambiguous preference to target monitoring resources intertemporally, and in so doing, to encourage full contract duration compliance. |
| URI: | http://purl.umn.edu/108795 |
| Institution/Association: | Agricultural Economics Society>85th Annual Conference, April 18-20, 2011, Warwick University, Coventry, UK |
| Total Pages: | 17 |
| Collections: | 85th Annual Conference, April 18-20, 2011, Warwick University, Coventry, UK
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| 46 Fraser.pdf | | 90Kb | PDF | View/Open |
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