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Dynamic adjustments in the Dutch greenhouse sector due to environmental regulations

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  • Verreth, Daphne M.I.
  • Emvalomatis, Grigorios
  • Bunte, Frank H.J.
  • Oude Lansink, Alfons G.J.M.

Abstract

Horticultural firms are dependent on energy to produce, while policy makers focus on reducing the use of energy and investment in energy-saving technologies. The paper aimed to asses Dutch greenhouse farmers‘ responses to policies that would affect prices of different energy inputs. The farmer’s behaviour is modelled in two steps: firms are assumed to maximize profit at given energy use level, and firms are assumed to minimize the discounted sum of energy costs. The model is estimated using farm survey data spanning the period 2001-2008. Short-run and long-run elasticities with respect to prices and investments in energy-using technology are estimated. The greenhouse sector shows a fast adjustment of energy capital towards its long-run equilibrium. This model provides a framework for assessing policy simulations. Policies will not have much more impact in the long-run compared to the short-run, and incentives to invest would result in an increase of the use of energy-saving technologies

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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 122nd Seminar, February 17-18, 2011, Ancona, Italy with number 99364.

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Date of creation: 10 Feb 2011
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Handle: RePEc:ags:eaa122:99364

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Related research

Keywords: Greenhouse horticulture; Energy; Dynamic duality; Adjustment costs; Agricultural and Food Policy; C51; C61; D92; Q12; Q18; Q48.;

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  1. Alfons Oude Lansink & Arno van der Vlist, 2008. "Non-Parametric Modelling of CO," Journal of Agricultural Economics, Wiley Blackwell, vol. 59(3), pages 487-497, 09.
  2. Frank Asche & Subal Kumbhakar & Ragnar Tveteras, 2008. "A dynamic profit function with adjustment costs for outputs," Empirical Economics, Springer, vol. 35(2), pages 379-393, September.
  3. Lansink, Alfons Oude, 2003. "Technical efficiency and CO2 abatement policies in the Dutch glasshouse industry," Agricultural Economics, Blackwell, vol. 28(2), pages 99-108, March.
  4. Alfons Oude Lansink & Spiro E. Stefanou, 1997. "Asymmetric Adjustment of Dynamic Factors at the Firm Level," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1340-1351.
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