May 24, 2016
Lincoln, Neb. — Simanti Banerjee, an assistant professor in the Department of Agricultural Economics at the University of Nebraska–Lincoln has received a four-year $498,641 grant from the United States Department of Agriculture (USDA) to study the effectiveness of conservation auction policies. The grant will initiate a new research collaboration between UNL and Fordham University where Banerjee’s collaborator on this project is based.
Agricultural lands have the potential to deliver a wide variety of benefits to the environment. In an effort to preserve natural habitat, the USDA has implemented policies, such as the Conservation Reserve Program (CRP). In exchange for a yearly rental payment, farmers enrolled in CRP agree to remove environmentally sensitive land from agricultural production.
The cost-effectiveness of these policies is uncertain. Fund disbursal from these policies are subject to budget constraints and often times landowners end up being over-compensated. The USDA implements reverse auctions, under the CRP to mitigate such over-compensation.
“Since these payments are an integral part of the agricultural system of the U.S., scientific investigation is important to identify auction design features which contribute positively to cost-effectiveness, while generating environmental and economic benefits for agricultural communities and society at large,” said Banerjee
Banerjee’s project will focus on the impact of information about the environmental effects of land use actions, auction format, social and community level ties and individuals’ tendencies to seek peer approval using economic experiments. Her experiments will involve real people making multiple choices on the basis of which they will get paid. The findings will provide insights about human behavior under multiple changing conditions.
The grant was made through the Agriculture and Food Research Initiative (AFRI) Foundational program, administered by USDA’s National Institute of Food and Agriculture (NIFA). AFRI supports projects that sustain and enhance agricultural and related activities in rural areas and to protect the environment, enhance quality of life and alleviate poverty.
In addition to private landowners, UNL students will play a critical role in this project according to Banerjee.
“The economic experiments will serve as a means to engage university students and stakeholders in experiential learning, providing them with a keener appreciation for human decision making.”
The role that empathy plays in human decision making is the focus of an additional grant awarded to Banerjee and Mark Burbach, environmental scientist in the School of Natural Resources, along with colleagues at the University of Michigan - Dearborn. The two-year, $80,258 grant from the Center for Behavioral and Experimental Agri-Environmental Research (CBEAR), will evaluate the effectiveness of empathetic messaging in conservation stewardship program participation.
The research team will be working with the USDA Natural Resources Conservation Service to send letters to farm operators inviting them to participate in a Conservation Stewardship Program in exchange for a financial incentive. Previous economic experimental research conducted by the team suggests that introducing empathetic messaging into that letter could result in a higher adoption of conservation practices.
“We hope to see a much higher adoption in conservation when using a combination of empathy and financial incentives,” said Burbach.
The project is one of 12 behavioral science projects awarded by CBEAR which aim to explain the complex human responses to agri-environmental policies implemented by the government, with the goal of helping to design better public programs.Simanti Banerjee
Department of Agricultural Economics
School of Natural Resources
Author: Haley Steinkuhler - IANR Media