Three Essays in Applied Environmental Economics

The first chapter The Impact of Agri-Environmental Measures on Farms’ Costs, Labour and Income, examines the economic effects of Agri-Environmental Measures (AEMs) implemented under the 2007–2013 programming period using farm-level data from 22 EU countries. While previous studies primarily focus on the environmental benefits of these policies, this chapter explores their broader economic implications, assessing how they influence farm-level costs, labour allocation, and income growth. Using a counterfactual scenario, we find that at the aggregate level, estimates considering all European countries report positive and significant effects on the studied outcomes. However, when examining results in more detail, heterogeneous effects emerge across country groups. The increase in costs is driven by specific expenditure categories that vary across regions. For instance, seed costs rise only in Eastern Europe, while crop protection costs increase only Western Europe, and only crop-specific costs significantly increase in Southern Europe. Regarding labour, we observe an increase in total labour input across all country groups, but unpaid labour (typically family labour) rises more sharply in Southern and Eastern Europe. On the other hand, income-related outcomes show a more homogeneous effect across regions, with farm income growing consistently among treated farms. We provide empirical evidence that challenges the assumption that AEMs are production-neutral. Instead, the results suggest that AEMs can generate income returns and enhance farm productivity, potentially influencing long-term farm investment strategies. This chapter contributes to the policy debate on the structure of AEMs by highlighting the advantages of shifting toward results-based schemes, which directly tie payments to measurable environmental improvements rather than prescribed actions that may create room for strategic investment decisions. The second chapter Nudging Toward Climate Adaptation. A Field Experiment on Informational Strategies in Organic Food Markets shows how informational frictions and cognitive biases influence consumer choices in the organic food market, often leading to suboptimal choices despite pro-environmental preferences. While previous studies highlight the role of nudges to foster sustainable behaviors in climate change mitigation, this chapter shifts the focus to climate adaptation, exploring whether targeted informational interventions can effectively steer consumers toward more climate-resilient food choices. Using a field experiment, we test two messaging strategies—a colloquial and a scientific approach—to assess their ability to reduce information asymmetry and reshape purchasing behavior. We show that while a simple, relatable message significantly increases purchases of climate-adaptive products, a scientific message is only effective among highly engaged consumers, suggesting that frictions in information processing persist even when knowledge gaps are reduced. These findings indicate that while some barriers can be addressed through clear, accessible communication, deeper cognitive constraints—such as information overload and moral licensing—limit the extent of behavioral change. By showing that the effectiveness of informational strategies depends on pre-existing purchasing habits and motivations, we highlight the importance of targeting messages based on consumer profiles to maximize engagement and drive more effective environmental decision-making. With the third chapter The Adverse Impacts of Disasters-In-Name Only, this dissertation continues to explore information frictions and consumer behavior, this time in the context of disaster mis-naming and its unintended economic consequences. We examine how disaster names that misattribute the geographic scope of destruction can negatively affect local economies, particularly tourism. Leveraging data on tourism flows in Italy, we compare areas that suffered direct earthquake damage with those affected only by the toponym, testing whether mislabeling alone leads to persistent declines in tourist arrivals. Our results show that regions incorrectly associated with disasters experience significant and lasting economic losses, despite the absence of physical damage. Once a disaster toponym enters public discourse, it is difficult to correct the misperception it creates, reinforcing economic downturns over time. Using a counterfactual setting, we identify a new mechanism of perception-driven economic shocks, showing that mis-communication alone can amplify the costs of a disaster beyond its physical effects. This work contributes to the broader literature on information asymmetry and communication strategies, highlighting how inaccurate disaster naming imposes unnecessary economic costs and long-term stigma on unaffected regions.