Alex Eben Meyer
Crop burning is a major contributor to the air pollution that kills about 7 million people a year. One prominent example of this global problem is Punjab, India’s breadbasket. Many Punjabi farmers grow rice in the summer and burn the leftover stalks in fall to plant wheat. The fires spew particulate matter across northern India and into New Delhi, home to more than 30 million people. Economics professor Rohini Pande, who specializes in development research, recently turned her attention to this problem.
“I’ve spent time in New Delhi at this time of year,” Pande says. “That was one motivation, but this is also a classic externalities problem: One farmer burns, and many people bear the costs downstream.” Pande and her colleagues wanted to see if they could improve upon the Indian government’s approach to the problem. One strategy that has been proposed by economists is to offer an end-of-season incentive to farmers who don’t burn. However, Pande realized that such an incentive could be partially paid before the rice harvest. To test what might be most effective, the researchers randomly assigned Punjabi farmers into three groups—partial upfront incentive, after-harvest incentive, and no incentive.
The research, to appear in American Economic Review: Insights, helped clear the air, literally and metaphorically. Among farmers receiving partial advance payment, burning was 10 percentage points lower than among farmers receiving after-harvest payments. For every $5,400 spent in incentives, enough pollution was eliminated to save a life. The after-harvest payments didn’t appear to change burning behaviors at all.
Pande hopes that by showing that partial upfront payments are more cost-effective, the research will spur Indian policy changes.
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