Spatial regulations can restrict chemical use more efficiently by linking benefits to the costs. California has instituted such a spatially based regulation of an agricultural fumigant to meet air quality standards. We examine the implications of alternative allocation mechanisms: use allocated based on a first come, first served basis; on quotas linked to historical use; and on the highest-value use. Although there are distributional impacts by crop, the overall change in aggregate value from using a highest value use mechanism rather than a first come, first served approach is estimated to be less than nine million.
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Paper provided by University of Maryland, Department of Agricultural and Resource Economics in its series Working Papers with number
28576.
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