In this chapter, we summarize the major contributions of behavioral economics methods and models in agricultural economics. Standard economic theories have failed in some instances to explain individuals’ food consumption behaviors or farmers’ production decisions and risk-taking behaviors. To better understand these behaviors, economists have started to use behavioral economic theories to explain the gap between the prediction of standard economic theory and reality. There is a large volume of literature documenting behavioral anomalies in food choice and a growing body of policy applications designed to take advantage of such anomalies to encourage greater health. Economists have widely used experimental research to explore consumer choice and to contribute to policy debates regarding diet and nutrition. We summarize some of the policy contributions in the realm of food assistance programs, such as the national school lunch program. The use of experimental methods examining farmer decisions is much more limited, making behavioral advances in this realm that much more difficult. While a small collection of behavioral anomalies has arisen from the agricultural production literature, each of these has arisen from secondary data analysis. Some extant behavioral models can explain much of this behavior, though empirical identification of a proper explanation is challenging.
JEL classifications: Q12, D9, Q18, D24