A Goal-Framing Approach to Green Payments’ Efficiency When Vertical Integration Is an Option
AUA Working Paper Series No. 2020 - 1
29 Pages Posted: 8 Aug 2022
Date Written: 2020
This article explores farmer’s decisions regarding the expansion of organic farming through intensive input use and the degree of in-house organic fertilizer production. Using a theoretical synthesis of two strands of the scholarly literature, namely pro-environmental norms and the goal-framing theory, the contribution of this article to the current literature is: (i) it redefines the concept of the crowding effects, which encompasses both changes in environmental preferences and in normative objectives; (ii) it points that the impact of a green payment on vertical integration depends on both the relative (i.e. the direction) and the absolute (i.e. the magnitude) size of the crowding effect being expected; (iii) it states that a trade-off between input use and vertical integration does always exist once a land subsidy is implemented, but not necessarily if a price premium is offered instead.
Keywords: personal and social norms, crowding theory, goal-framing theory, green payments vertical integration
JEL Classification: D91, Q18, Q58
Suggested Citation: Suggested Citation