Environmental identity economics: an application to farmers’ pro-environmental investment behaviour

Abstract This study proposes an environmental identity economics theory that can improve our understanding of pro-environmental behaviour. We test the potential by analysing farmers’ decisions to invest in renewable energy production using a hybrid choice model. Our findings illustrate farmers with strong require less financial incentive invest. Furthermore, lower compensation is found be sufficient induce commit more binding investment contracts. stress need for differentiated designs agri-environmental programmes and mechanisms enhance identity.