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Demand for an Environmental Public Good in the Time of COVID-19: A Statewide Water Quality Referendum

George Parsons, Laura Paul, and Kent Messer

Due to COVID-19, many households face hardship — unemployment, an uncertain economic future, forced separation, and more. At the same time, the number of people participated in outdoor recreation is reported to be on the rise, as it was one of the few activities still permitted. How these experiences affect the public’s willing to pay for environmental public goods is unknown. During the pandemic, we conducted a stated preference survey to value statewide water quality improvements in Delaware. While a majority of participants report experiencing hardship of some sort (economic, emotional, etc.), mean household WTP declined by only 7% post-COVID. Based on our results, legislation being debated at the time of the outbreak passes a benefit-cost test (and majority vote) either pre- or post-COVID.

Conditional and Unconditional Yield Gains from Drought-Tolerant Maize and the Economic Implications for Farmers in Southern and Eastern Africa

Laura Paul

Improved crop varieties, such as drought-tolerant (DT) maize, can mitigate crop failures and provide substantial improvements in yield level and variance. However, evidence of these benefits from farmers practicing rainfed agriculture is thin. This paper assesses the advantage of the DT trait using data from on-farm trials of DT maize and high-resolution precipitation data (10-day measurements at a 0.05° resolution) in four countries in southern Africa, over four years. While prior work has found DT maize to have up to twice the yields of comparison varieties in controlled settings, I find that on farms, yield only slightly exceeds that of other improved varieties of maize: DT has 7% higher yields on average, and 15% higher yields under moderate drought stress. Moreover, there is significant heterogeneity in returns from the DT maize technology with the lowest returns estimated for low-performing farms. The economic implications of these reduced yield advantages for some farmers are very small net returns ($33 in a normal year, $100 in a year with mid season drought) relative to a comparison improved variety of maize.

Bundling Stress Tolerant Seeds and Insurance for Resilient Small-scale Agriculture: Impacts and the Challenge of Learning about Technologies with Stochastic Benefits

Steve Boucher, Michael Carter, Jon Einar Flatnes, Travis Lybbert, Jonathan Malacarne, Paswel Marenya, and Laura Paul

Challenges in Recruiting U.S. Farmers for Policy-Relevant Economic Field Experiments (AEPP 2020)

Collin Weigel, Laura Paul, Paul Ferraro, and Kent Messer

To develop evidence-based agricultural policies, researchers increasingly use insights from economic field experiments. These insights are often limited by the challenges of recruiting large and representative samples of farmers. To improve the effectiveness and cost-efficiency of farmer recruitment, researchers should apply the same experimental methods to the recruitment process that they apply to their main research questions. Here we experimentally evaluate ten recruiting strategies in two large-scale, high stakes experiments. We find that monetary incentives and reminders are effective, but costly. Costless strategies, such as prominently citing a well-known institution as the sponsor, had positive but small, effects on recruitment.

Nudge or Sludge? An Experimental Game Illustrating How Misunderstood Scientific Information Can Change Consumer Behavior

Laura Paul, Olesya Savchenko, Maik Kecinski, and Kent Messer

Scientific information can be designed to help people understand and describe the natural world. Consumers regularly seek out information about their food and drink to help inform their decisions. While this search is generally viewed as a positive process, it becomes troubling when consumers respond negatively to scientific information, even when this scientific information does not intend to convey a negative signal. This misunderstanding and stigmatization can be difficult from the perspective of federal and state regulations related to the labeling of food and drink. Labels have often been compared to the “nudges” popularized by behavioral economics. Nudges are low-cost interventions made at the time of a decision, and they can have large effects on behavior, but they have been referred to as “sludges” when they end up misleading people. The objective of this paper is to introduce an engaging and interactive classroom activity using a second-price auction and an informational label treatment to introduce behavioral economics and measurement of its effects. Additional classroom discussion topics are presented, including comparing nudges and sludges, the public response to the treatment of tap water, and the role of safety information in consumer response.