Suchergebnisse

ABSTRACTWe explore poor farmers' incentives to adopt production systems that increase soil carbon sequestration, focusing on the impact of risk. A dynamic optimization model of conservation agriculture adoption is presented, where farmers optimize over expected utility of profits from agriculture and carbon sequestration. Adoption impacts on agricultural productivity are modeled as a combination of the technological effects of the new system, and productivity effects of changes in soil carbon on agricultural output. Comparative static results indicate increases in soil carbon sequestration price and the discount rate have unambiguous impacts on equilibrium soil carbon levels; the former leading to higher, and the latter to lower, carbon levels. Increases in the price of agricultural output and risk aversion have ambiguous impacts, depending on the relative strength of the productivity and technology effects. The paper concludes with a discussion of designing soil carbon payment mechanisms to benefit low income farmers.

Abstract
A new theory of altruistic corporate social responsibility is developed. Firms that advertise their social and environmental good works in effect solicit charitable contributions from customers, employees, investors and other stakeholders. They compete with not-for-profits in the market to supply public and altruistic goods. To analyze how corporate altruism affects firm valuations, a model is developed in which investors gain utility both from personal consumption and from making donations to worthy causes. A share in a "responsible" firm is a charity-investment bundle. When individuals view corporations and not-for-profits as equally competent suppliers of charity-related "warm glow," small changes in firms' social policies induce exactly offsetting changes in individuals' portfolio choices. There is no effect on firm valuations, and no change in the aggregate supply of good works. When a sizable fraction of investors prefer corporate philanthropy over direct charitable giving (e.g., to avoid taxation of corporate profits), firm valuations will be maximized by following social policies that involve strictly positive levels of corporate altruism.