Agriculture is a main source of environmental degradation and biodiversity decline. We investigate the causal effects of culture on pro-environmental behaviors of the agricultural population (farmers), and how policy instruments interact with culture to influence individual 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 in their norms and values. Second, in 2014, there was an unexpected and vast agri-environmental policy reform that increased the monetary incentive to enroll land into biodiversity conservation. Using a spatial difference-in-discontinuities design and panel 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 2014 policy reform, the French-speaking farmers enrolled more additional land than the German-speaking farmers, shrinking the discontinuity. These findings indicate that cultural effects on pro-environmental behaviors are more important when external incentives are relatively low, and with increased economic incentives, cultural differences become less important.
