Farmers’ behavior towards sustainable agricultural production is key to reducing the environmental footprint of agriculture and conserving biodiversity. We investigate the causal effect of culture on pro-environmental behaviors of farmers, and how policy instruments interact with culture to influence behavior. We exploit a unique natural experiment in Switzerland, which consists of two parts.
First, there is an inner-Swiss cultural border between German- and French-speaking farmers who share the same natural environment, economy, and institutions, but differ culturally in their norms and values. Second, we exploit the effects of an agri-environmental policy reform that increased the monetary incentives to enroll land into biodiversity conservation. Using a spatial difference-in-discontinuities design and panel census data of all Swiss farms between 2010 and 2017, we show the following findings: Before the reform, farmers on the French-speaking side of the cultural border systematically enrolled less land into biodiversity conservation, compared to the German-speaking side. With increased monetary incentives following the policy reform in 2014, the French-speaking farmers enrolled relatively more additional land than the German-speaking farmers, shrinking the discontinuity.
These findings indicate that while there exist cultural differences in pro-environmental behaviors, increased monetary incentives can reduce the importance of cultural differences. We discuss the implications for policy.
