Beyond Utility: The Role of Fairness and Reciprocity Among Kiwi Farmers

Fairness is central to the New Zealand psyche. We agree with “fair enough” or “sounds fair” and used to watch Fair Go for entertainment. Farmers have long held that they have not received a ‘fair shake of the stick’ regarding perceptions of their environmental or social behaviours. NZ has a bit of a narrative that farmers are ‘utility maximisers’ in economic speak. That is, they aim to achieve the highest possible benefit from their resources, often focusing on maximising profit or personal well-being at the expense of the environment or the wider social good. Not everyone thinks this, of course, but it is an undercurrent in many news stories about NZ’s environment.

I researched farmers’ perceptions of fairness a few years ago to test this idea. Do farmers really prioritise their own benefit above other factors when it comes to managing their land?

Reciprocity is a core value in New Zealand, emphasised strongly by Māori, who favour mutually beneficial exchanges and equitable treatment. My research found that farmers are often willing to trade off some overall industry efficiency to ensure a fairer distribution of burdens amongst individuals – reflecting a principle of reciprocity. Farmers are not solely focused on maximising their benefits but are highly considerate of the well-being of others, especially within their industry. This reciprocity ethic suggests that farmers often value cooperative and equitable solutions that benefit a broader community rather than solely prioritising individual gains at the expense of others.

There are three prominent theories of distributive justice, or ‘fairness’.

Utilitarian Fairness:

Utilitarianism asserts that the fairest action is the one that results in the greatest overall happiness or utility for the greatest number of people. This theory focuses on the outcomes of actions, aiming to maximise overall well-being and minimise suffering, regardless of how benefits and burdens are distributed among individuals.

Egalitarian Fairness:

Egalitarianism is the belief that fairness requires equality, emphasising that individuals should be treated as equals and that resources and opportunities should be distributed to ensure fairness and equality for all. This theory advocates for equal access to essential goods and services, and it often supports redistributive policies to reduce disparities and ensure that everyone has a fair chance to succeed.

Rawlsian Fairness:

Proposed by philosopher John Rawls, the Rawlsian theory of justice, also known as “justice as fairness,” is based on two key principles, the important one here being that social and economic inequalities are permissible only if they benefit the least advantaged members of society In other words, any differences in wealth or opportunities should help improve the situation of those who are worst off.

The Method

In the experiment, farmers were presented with a short fictional scenario in which the Australian government has tasked the horticultural sector with reducing water and energy use by 12% each. The story was intended to provide a familiar yet non-threatening context by situating the scenario in Australia and assigning participants the role of a packhouse manager in the Australian apple industry. The farmers had to decide how to allocate the reduction targets between two growers, Sarah and Steve, based on the impact on their production. Sarah faces a significant impact from water restrictions but none from energy restrictions, while Steve faces a moderate impact from both. The farmers chose from three solutions: a utilitarian one with the lowest overall industry impact but most unequal burden distribution, a Rawlsian one with a higher overall impact but more equitable distribution, and an egalitarian one with the highest overall impact but equal burden distribution. The table below simplifies the outcomes of their choices:

Trade-offs in the allocation mechanisms

There were several variations on this distribution challenge, but I will just stick to one here. Additionally, participants answered quantitative and qualitative questions about their characteristics and opinions on environmental mitigation and cost-sharing mechanisms.

The Results

Eighty-four farmers across every region in New Zealand took part in the experiment. The table below presents the results of this first distribution challenge.

Respondents’ selection of allocation mechanisms

Most respondents chose to trade off some overall industry production (efficiency) to allocate burdens between the growers in a way that they perceived to be fairer. The farmers preferred to trade off some utility at both an aggregate level and an individual level to enhance the equity of allocations.

This suggests that production efficiency was not the foremost concern for most respondents. There was little connection between personal or demographic characteristics and fairness perceptions, with one exception: income.

One of the concerns of the research was to investigate whether there was a relationship between income and fairness preferences. The results demonstrated a connection between income, fairness preferences, and cost allocation preferences. The results suggest that income is correlated with fairness preferences in that those in a higher income bracket, on average, prefer less egalitarian allocations.

An exception is the very highest income bracket, which preferred a Rawlsian allocation. Furthermore, those who prefer a utilitarian allocation choose to allocate environmental mitigation costs less equitably by reducing their own costs at the expense of others. These findings support the environmental justice proposition that greater wealth could result in greater inequality of environmental outcomes. The results suggest that caution should be taken when developing environmental mitigation initiatives to ensure that input is obtained from stakeholders across a wide range of income brackets.

Conclusion

From what I found; New Zealand farmers are not primarily utility maximisers focused solely on profit. Instead, the results indicate a strong preference for fairness and equity in the distribution of environmental burdens, even at the cost of overall industry or individual efficiency. Farmers care about social and environmental impacts, which were addressed separately through behavioural experiments in this survey. Additionally, the correlation between income and fairness preferences underscores the importance of incorporating diverse socioeconomic perspectives in environmental policy-making. To ensure fair and effective environmental mitigation initiatives, it is crucial to engage stakeholders across different income brackets, fostering policies that are both equitable and widely supported.