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Nudging Farmers to Comply With Water Protection Rules – Experimental Evidence From Germany

Peth, Denise, Mußhoff, Oliver, Funke, Katja, Hirschauer, Norbert
Ecological economics 2018 v.152 pp. 310-321
agricultural runoff, business management, compliance, farmers, nitrogen, surface water, Germany
Nitrogen runoff from agricultural fertilisation causes serious environmental damage to surface waters. Environmental and consumer advocates demand government intervention to mitigate these externalities. The present study examines the effects of nudge-based regulatory strategies. Using an incentivised single-player, multi-period business management game as an experimental device, we study how nudges affect compliance with the minimum-distance-to-water rule in a sample of German farmers. We investigate two different nudge treatments: a nudge with information and pictures showing environmental and health damages that are presumably caused by breaching the minimum-distance-to-water rule, and a nudge with an additional social comparison suggesting that the majority of farmers in the same region comply with the rule. Three core experimental outcomes are observed: first, nudging has a preventive effect and reduces not only the share of non-compliant participants, but also the total area that is illicitly fertilised. Second, against all expectations, the preventive effect of the nudge with an additional social comparison is not stronger than that of the nudge with information and pictures alone. Third, despite the overall positive effects of nudging, the nudge with social comparison even increased the severity of non-complying behaviour in the deviant subpopulation.