Economic modelling generally assumes that businesses are profit maximisers. However, behavioural economics holds that businesses pursue multiple objectives and may even sacrifice some profit. This has implications for the effectiveness of incentive-based environmental policies. Using
Danish farmers as a case, this paper examines whether non-economic rationales may trump economic ones in farmer decisions, and, unlike previous research, we quantify how widespread non-economic values are compared to more economic values. Data derive from a survey (1164 responses) of Danish
conventional farmers' decision rationales regarding their use of pesticides. Using cluster analysis, we show that some farmers are more economically motivated while other farmers are more focused on optimising yield and pay less attention to expenditures and crop prices. Furthermore, we find
that the two groups differ in their response to policy instruments; farmers who focus on yield indicate less responsiveness to economic policy instruments. The results imply that it is important to implement a broad array of policy instruments to match different farmer rationales.
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Document Type: Research Article
Department of Environmental Science, Aarhus University, Frederiksborgvej 399 Roskilde, DK-4000, Denmark
Institute of Food and Resource Economics, University of Copenhagen, Rolighedsvej 25 Frederiksberg C., DK-1958, Denmark
Publication date: October 1, 2012
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