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Using Field-level Characteristics as Proxy Measures to Test for the Presence of Economies of Scale in Nonpoint Pollution Control

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  • Caplan, Arthur J.
  • Gilbert, John
  • Chatterjee, Devalina

Abstract

We use parametric and nonparametric methods to estimate correlations between average control cost and three field-level characteristics—field size and delivered phosphorous per field and per acre—as proxies for economies of scale in controlling nonpoint pollution. We combine load and delivery-ratio estimates for more than 12,000 fields in the Bear River Basin, Utah, with estimates of control costs and effectiveness of management practices from the literature. Results suggest a negative relationship between control cost and delivered phosphorous per field and per acre. Ranking fields by phosphorous load therefore prioritizes management-practice subsidies by economies of scale.

Suggested Citation

  • Caplan, Arthur J. & Gilbert, John & Chatterjee, Devalina, 2013. "Using Field-level Characteristics as Proxy Measures to Test for the Presence of Economies of Scale in Nonpoint Pollution Control," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 42(2), pages 1-22, August.
    • Handle: RePEc:ags:arerjl:155317
    DOI: 10.22004/ag.econ.155317
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