The Economics of a Public Fund for Environmental Amenities: A Study of CRP Contracts

Babcock, Bruce A.; Lakshminarayan, P. G.; Wu, Junjie; Zilberman, David

doi:10.2307/1243852

Cited by 131 publications

(45 citation statements)

References 4 publications

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“…In the context of agriculture, payments for ecosystem services are usually payments to landowners for leaving high-value conservation land uncultivated or payments that arise from an understanding that a working agricultural landscape, while not an undisturbed ecosystem, can perform a diverse array of services that go above and beyond producing food (Randall 2002, Sandhu et al 2008). These services include but are not limited to soil conservation and carbon sequestration through no-till agriculture or planting of hedgerows Diagana 2003, Knowler andBradshaw 2007), water conservation or quality improvement, and maintenance or conservation of biodiversity through practices such as active promotion of pollinators, intercropping to promote both plant and animal biodiversity, and establishing planting of native plant species (Babcock et al 1996, DiFalco 2012. Above and beyond the multifunctionality or ecosystem service benefits provided by these practices, they can also generate indirect benefits for farmer well-being through nonpecuniary externalities such as improved health through reduced exposure to pesticides (Huang et al 2003).…”

Section: Economic Factors That Support Diversificationmentioning

confidence: 99%

Economic Factors Affecting Diversified Farming Systems

Bowman¹,

Zilberman²

2013

E&S

Self Cite

204

129

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ABSTRACT. In response to a shift toward specialization and mechanization during the 20th century, there has been momentum on the part of a vocal contingent of consumers, producers, researchers, and policy makers who call for a transition toward a new model of agriculture. This model employs fewer synthetic inputs, incorporates practices which enhance biodiversity and environmental services at local, regional, and global scales, and takes into account the social implications of production practices, market dynamics, and product mixes. Within this vision, diversified farming systems (DFS) have emerged as a model that incorporates functional biodiversity at multiple temporal and spatial scales to maintain ecosystem services critical to agricultural production. Our aim is to provide an economists' perspective on the factors which make diversified farming systems (DFS) economically attractive, or not-so-attractive, to farmers, and to discuss the potential for and roadblocks to widespread adoption. We focus on how a range of existing and emerging factors drive profitability and adoption of DFS. We believe that, in order for DFS to thrive, a number of structural changes are needed. These include: 1) public and private investment in the development of low-cost, practical technologies that reduce the costs of production in DFS, 2) support for and coordination of evolving markets for ecosystem services and products from DFS and 3) the elimination of subsidies and crop insurance programs that perpetuate the unsustainable production of staple crops. We suggest that subsidies and funding be directed, instead, toward points 1) and 2), as well as toward incentives for consumption of nutritious food.

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Section: Economic Factors That Support Diversificationmentioning

confidence: 99%

Economic Factors Affecting Diversified Farming Systems

Bowman¹,

Zilberman²

2013

E&S

Self Cite

204

129

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“…The actual determination of these scoring rules has been widely discussed, see e.g. [5,4]. The applied scoring has also been an issue in the wholesale market for electricity in California, where the choice of an unsuitable scoring rule had severe consequences, see [12] and [13].…”

Section: Introductionmentioning

confidence: 99%

A Sealed-Bid Two-Attribute Yardstick Auction Without Prior Scoring

2015

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We analyze a two-attribute single item procurement auction that uses yardstick competition to settle prices. The auction simplifies the procurement process by reducing the principal's articulation of preferences to simply choosing the most preferred offer as if it was a market with posted prices. This is done simply by replacing the submitted sealed bids by yardstick bids, computed by a linear weighting of the other participants' bids.We show that there is only one type of Nash equilibria where some agents may win the auction by submitting a zero price-bid. Using a simulation study we demonstrate that following this type of equilibrium behavior often leads to winner's curse. The simulations show that in auctions with more than 12 participants the chance of facing winner's curse is around 95%.Truthful reporting, on the other hand, does not constitute a Nash equilibrium but it is ex post individually rational. Using a simulation study we demonstrate that truthful bidding may indeed represent some kind of

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“…This research has implications for other targeting programs as well. Babcock et al (1996Babcock et al ( , 1997 consider targeting options under the USDA Conservation Reserve Program. However, in these analyses, there is no explicit provision of 3 information that allows the budget managers to improve the allocation of limited resources, thereby increasing overall environmental benefits.…”

Section: Introductionmentioning

confidence: 99%

Nonpoint Source Pollution Control Under Incomplete and Costly Information

Farzin

Kaplan

1999

SSRN Journal

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We analyze the efficient management of nonpoint source pollution (NPS) under a limited pollution control budget and incomplete information. We focus on the tradeoff between data collection and pollution abatement efforts by incorporating information acquisition into a NPS pollution control model. Comparative static results show conditions under which (i) a favorable change in the abatement costs at one source may lead to an increase in the treatment level at all sources, and vice versa, (ii) an increase in data collection cost leads to an increase in data collection level, and (iii) an increase in the efficiency of information acquisition leads to a decrease in the level of data collection. More importantly, the model simulations illustrate that acquiring and exploiting information on heterogeneity of sediment loading distributions across polluting sources leads to a more efficient budget allocation and hence a greater reduction in pollution damage than would be the case without such information. JEL Classification: D61, D81, D83, Q28

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The Economics of a Public Fund for Environmental Amenities: A Study of CRP Contracts

Cited by 131 publications

References 4 publications

Economic Factors Affecting Diversified Farming Systems

Economic Factors Affecting Diversified Farming Systems

A Sealed-Bid Two-Attribute Yardstick Auction Without Prior Scoring

Nonpoint Source Pollution Control Under Incomplete and Costly Information

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