Optimal Design Of A Voluntary Green Payment Program Under Asymmetric Information
AbstractGreen payment programs, where the government pays farmers directly for environmental benefits, are an alternative to the current method of achieving environmental benefits which restricts farming practices in exchange for deficiency payments. This article presents a voluntary green payment program using the principles of mechanism design under asymmetric information. Information asymmetry arises because the government knows only the distribution of farmersÂ’' production situations, rather than farm-specific information. The program is demonstrated with irrigated corn production in the Oklahoma high plains. A green payment program can reduce budget costs and pollution, while increasing the net social value of corn production.
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Bibliographic InfoArticle provided by Western Agricultural Economics Association in its journal Journal of Agricultural and Resource Economics.
Volume (Year): 20 (1995)
Issue (Month): 02 (December)
Environmental Economics and Policy;
Other versions of this item:
- Wu, JunJie & Babcock, Bruce A., 1995. "Optimal Design of a Voluntary Green Payment Program Under Asymmetric Information," Staff General Research Papers 843, Iowa State University, Department of Economics.
- JunJie Wu & Bruce A. Babcock, 1995. "Optimal Design of a Voluntary Green Payment Program Under Asymmetric Information," Center for Agricultural and Rural Development (CARD) Publications 95-wp131, Center for Agricultural and Rural Development (CARD) at Iowa State University.
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