Theoretical Framework

Classical Economics

 Classical economic theory states that farmers' decisions to use certain agricultural

technologies are determined by rationally weighing the costs and benefits associated with

using those technologies (Staaz & Eicher, 1998). The rational actor model of human

decision-making posits that individuals will behave in consistent, well-ordered ways to

maximize personal gains. Preferences are considered exogenous, meaning other people or

institutions do not influence their decision-making (Gowdy, 2004, p. 246). For example,

a farmer may decide to grow a specific crop because it is subsidized by the government

and the economic incentives from the subsidies provide the greatest return.

 However, some economists argue that, "individual actors do not act as cost-benefit

calculators who continuously adapt their behavior to changing environmental conditions.

They may or may not respond 'rationally' to incentives" (Gowdy, 2004, p. 249). They

argue that the classical economic model alone does not take into account individuals'

endogenous preferences. Endogenous preferences can include intrinsic values, future

values, personal history, social influences and context (Gowdy, 2004; Osiniski,

Kantelhardt, & Heissenhuber, 2003). According to Osiniski, Kantelhardt, and

Heissenhuber, (2003), the economic model can incorporate endogenous components,

such as assessing the intrinsic values of landscapes by determining how much people are

willing to pay for environmental service. However, transferring the valuation placed on

landscapes is not transferable between regions.

 There is evidence that people do act in ways to affect other's wellbeing and are

influenced by other people's preferences. People do make choices based on fairness,

which could keep an individual from maximizing personal benefit (Johnson, Rutstrom &