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Ozone pollution and farm profits in England and Wales

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Author Info

  • Harris Neeliah
  • Bhavani Shankar

Abstract

Tropospheric ozone is an air pollutant known to adversely affect crop yields across Europe. Experimental work is underway to quantify yield effects at ambient ozone levels for a number of crops. In this article, we undertake direct, farm-level evaluation of the impact of ozone by estimating a multi-output profit function using a panel dataset of cereal farms in England and Wales. A system of equations, comprising the profit function, input and output share equations is estimated using a fixed-effects seemingly unrelated regression technique, with ozone as a quasi-fixed input. Estimated parameters are used to calculate tropospheric ozone-related profit and output supply elasticities. The main findings from the profit function show that a 10% increase in average ozone levels would decrease variable profits by 1.3% and wheat output supply by 1%. These results are of a significantly lower magnitude, but qualitatively consistent with findings from similar studies carried out in North America.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/00036840701858158
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 42 (2010)
Issue (Month): 19 ()
Pages: 2449-2458

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Handle: RePEc:taf:applec:v:42:y:2010:i:19:p:2449-2458

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