Agri-environmental investment support that compensates landowners for the costs of wetland creation and restoration is considered an effective policy for increasing biodiversity and reducing nonpoint emissions in agricultural landscapes. This study assesses the extent to which such an agri-environmental scheme is propagated across landowners and examines determinants of the adoption of the policy in Sweden. Using spatiotemporal variations in the implementation of the scheme, we show that endogenous spatial interaction across landowners helps propagate the adoption of the scheme. We did not find spatial interactions to play a role in the disadoption of the scheme.
