Thilo W. Glebe () (Environmental Economics and Agricultural Policy Group, Technical University of Munich)
Abstract
The cost-effectiveness of agri-environmental auctions soliciting two-dimensional bids consisting of conservation activity and compensation payment is analyzed. Taking a selfselecting contract schedule as a benchmark, an optimally designed auction has the potential to reduce government expenditures significantly. However, the relative cost-effectiveness of a bidding process is determined by the bid scoring system. If the government imposes stricter environmental restrictions to farmers with lower compliance costs, a bid ranking system adding scores for environmental performance and financial demands is more cost-effective than an index calculating the ratio between proposed compensation payments and environmental program benefits.
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Publisher Info
Paper provided by Technische Universität München, Environmental Economics and Agricultural Policy Group in its series Discussion Papers with number
032006.
Length: 19 pages Date of creation: Mar 2006 Date of revision:
2008 Publication status: Published in European Review of Agricultural Economics. No. 35(2), 143-165. (title: Scoring two-dimensional bids: How cost-effective are agri-environmental auctions?) Handle: RePEc:tuu:papers:032006
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