Moral Hazard and Risk Management in Agri‐environmental Policy
研究发现风险厌恶的农户更可能遵守农业环境政策以管理收入不确定性，且监管者可通过调整监管力度和罚款金额来降低违规行为，为欧盟农业环境政策改革提供参考。
This paper develops the key finding of Ozanne, Hogan and Colman (2001) that risk aversion among farmers ameliorates the moral hazard problem in relation to agrienvironmental policy compliance. It is shown that risk averse farmers who face uncertainty in their production income are more likely to comply with such a policy as a means of risk management. In addition, it is shown that a principal who has control over both the level of monitoring and the size of penalty, if detected, can reduce non‐compliance by adjustments to these instruments which increase the variance of farmers' income but leave the expected penalty unchanged. It is concluded that risk management by both principals and agents has the potential to diminish the moral hazard problem, especially given proposed developments in agri‐environmental policy in the European Union.