Moral hazard, risk aversion and compliance monitoring in agri-environmental policy
将农业环境政策建模为社会福利最大化问题，研究监控成本与风险规避程度如何影响道德风险及最优监控力度。
Agri-environmental policy is modelled as a social welfare maximisation problem that recognises the potential trade-off between increased environmental benefit and increased cost of monitoring compliance. Moral hazard arises because monitoring does not detect all those who fail to comply with contractual obligations. It is shown that if monitoring costs are negligible or fixed, or farmers are highly risk averse, the moral hazard problem can be eliminated. However, if monitoring costs depend on monitoring effort and the degree of risk aversion is low, only a second-best solution can be obtained. Numerical simulations suggest that optimal monitoring effort declines with increasing farmer risk aversion. © Oxford University Press and Foundation for the European Review of Agricultural Economics 2001.