This research incorporates the development and adoption of an induced technology under uncertainty into a conceptual dynamic model to more broadly examine efficient policies for mitigating invasive species infestations. We find that under optimal policy, marginal costs of adopting conventional control measures are equal to the sum of the marginal benefits from development and adoption of new technology, as well as the use of conventional control measures. This result implies that a resource allocation designed for controlling invasive species is not adequate when an induced technology is not considered. Our results also reveal that the shadow values associated with the probabilities of developing and then adopting an induced technology increase as the shadow values associated with the stock of an invasive species population increase.
Based on 2004 CEAP-ARMS Phase II data, higher-sales farms not participating in a conservation programme adopted farmland conservation structures much more intensively on wheat fields than did any other farm-size type among conservation programme participants or non-participants. Survey results suggest that wheat farms not participating in a conservation programme more frequently adopted infield conservation structures, while conservation programme participants more often installed field perimeter conservation structures. Wheat producers, particularly those not participating in a conservation programme, recognize productivity and profitability benefits of infield structures as sufficient to promote their adoption without programme incentives. However, for field perimeter structures, programme incentives may be needed to encourage their adoption because benefits are more commonly off-site. To supplement univariate comparisons between conservation programme participants and non-participants, we used a cost-function based acreage allocation model to examine adoption of structural conservation practices, including such practices as strip cropping, terraces, grassed waterways, field borders, and stream-side herbaceous buffers. To accurately assess the potential environmental impacts of conservation programmes, it is important to account for the variability in on-site field, farm, and environmental conditions influencing producer adoption decisions. Econometric models suggest that not accounting for factors such as field, farm, operator, and environmental attributes will likely under- or overestimate adoption of conservation structures with respect to input and commodity prices, regardless of programme participation status.
[1] Theory suggests that in the absence of transaction costs, pollution externalities can be mitigated efficiently by charging polluters a tax equal to the marginal social cost of pollution. All other regulatory mechanisms therefore may be no more efficient than a marginal cost pollution tax. We developed a stylized model of dynamic groundwater pollution without transaction costs to examine alternate policies. Using mitigation cost, tax burden, and excess burden we compared the relative efficiency of each tax policy under competitive market conditions. For groundwater nitrate pollution in a Midwestern farming region, results show that the least cost policy is a constant tax on the polluting input, followed by a variable tax on the polluting input and a pollution tax.
Summary
This paper has demonstrated that the omission of a time lag associated with contaminant transport processes will result in sub‐optimal nitrogen fertilizer use by, first, presenting a surface and groundwater quality‐constrained dynamic optimization model of nitrogen fertilizer use. Potential groundwater contamination has been presented in a probabilistic manner, with the probability of contaminant level exceeding the MCL.
Second, we have discussed the economic effects of fiscal programs including a user tax and a unit subsidy for the reduction of nitrogen fertilizer use. We have highlighted that the introduction of a unit subsidy program via redeemable coupons transforms the fertilizer market into a market characterized by perceived imperfect competition, and the government subsidy expenditure under imperfect competition is greater than under perfect competition. Therefore, directly incorporating water quality‐constraints, and accounting for perceived imperfect competition results in a better understanding of the impacts of government policy.
Exports by the kth country to the jth importing country are given by:Exports by the ith country to thejth importing country are given by: " n X,, = c,/ + Ac, + d,/(a, -Z: (cJJ + Ac,)Y(b, + Z: do) (13) J J StaffPapers 17(1): 179-201. Ballenger, Nicole. 1988. PSEs: What they are and their role in trade negotiations. Choices (First Quarter): 36-37.
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