This paper investigates the efficiency of carrot and stick policies to reduce investment in coca cultivation in rural Colombia. To measure behavioral responses to anti-drug policies, we conducted a framed field experiment with farmers living in one of the most important coca growing areas. Our experimental design allows identifying heterogeneous producer types and measuring their behavioral response to carrots and sticks. We provide an example on how knowledge on distribution types can be used to design an optimal anti-drug policy. We find that about one third of the farmers have moral costs that are high enough to deter them from investing in coca and hence, would require no external incentives. Yet destroying coca completely is prohibitively costly for two fifths of the participants who would require an extremely high compensation or risk of eradication.
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