@article{65049c8b37654482840f1316266a77c6,
title = "Adopting bioenergy crops: Does farmers{\textquoteright} attitude toward loss matter?",
abstract = "We apply prospect theory to examining farmers{\textquoteright} economic incentives to divert a share of their land to bioenergy crops (miscanthus and switchgrass in this study). Numerical simulation is conducted for 1,919 rain-fed U.S. counties to identify the impact of loss aversion on bioenergy crop adoption, and how this impact is influenced by biomass price, discount rate, credit constraint status, and policy instruments. Results show that ignoring farmer's loss aversion causes overestimation of miscanthus production but underestimation of switchgrass production, particularly when farmers are credit constrained and have a high discount rate. We find that establishment cost subsidy induces more miscanthus production whereas subsidized energy crop insurance induces more switchgrass production. The efficacy of these two policy instruments, measured by biomass production increased by per dollar of government outlay, depends on the magnitude of farmers{\textquoteright} loss aversion and discount rate.",
keywords = "D81, Q15, Q16, bioenergy crops, crop insurance, establishment cost, loss aversion, miscanthus, prospect theory, switchgrass",
author = "Mohit Anand and Ruiqing Miao and Madhu Khanna",
note = "Funding Information: NIFA, USDA, Grant/AwardNumber: 2017- 67019-26283; Center for Advanced Bioenergy and Bioproducts Innovation, U.S. Department of Energy, Office of Science, Office of Biological and Environmental Research, Grant/AwardNumber: DE-SC0018420 Funding Information: information NIFA, USDA, Grant/AwardNumber: 2017-67019-26283; Center for Advanced Bioenergy and Bioproducts Innovation, U.S. Department of Energy, Office of Science, Office of Biological and Environmental Research, Grant/AwardNumber: DE-SC0018420We thank the three anonymous referees and the editor Awudu Abdulai for their insightful and helpful comments. We also thank the financial support from a NIFA/USDA award (Award number: 2017-67019-26283). Madhu Khanna is grateful for funding provided by the DOE Center for Advanced Bioenergy and Bioproducts Innovation (U.S. Department of Energy, Office of Science, Office of Biological and Environmental Research under Award Number DE-SC0018420). The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript. Funding Information: We thank the three anonymous referees and the editor Awudu Abdulai for their insightful and helpful comments. We also thank the financial support from a NIFA/USDA award (Award number: 2017-67019-26283). Madhu Khanna is grateful for funding provided by the DOE Center for Advanced Bioen-ergy and Bioproducts Innovation (U.S. Department of Energy, Office of Science, Office of Biological and Environmental Research under Award Number DE-SC0018420). The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript. Publisher Copyright: {\textcopyright} 2019 International Association of Agricultural Economists",
year = "2019",
month = jul,
doi = "10.1111/agec.12501",
language = "English (US)",
volume = "50",
pages = "435--450",
journal = "Agricultural Economics",
issn = "0169-5150",
publisher = "Wiley-Blackwell",
number = "4",
}