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Multiple Agents, And Agricultural Nonpoint-Source Water Pollution Control Policies

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  • Smith, Rodney B.W.
  • Tomasi, Theodore D.

Abstract

Assuming asymmetric information over farmer profits and zero transaction costs, prior literature has suggested that when regulating nonpoint source water pollution, a tax on management practices (inputs) can implement full-information allocations and is superior to a tax on estimated runoff. Using mechanism design theory under asymmetric information, this paper show that under the same assumptions, management practice taxes and taxes on estimated runoff are equally efficient.

Suggested Citation

  • Smith, Rodney B.W. & Tomasi, Theodore D., 1999. "Multiple Agents, And Agricultural Nonpoint-Source Water Pollution Control Policies," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 28(1), pages 1-7, April.
    • Handle: RePEc:ags:arerjl:31489
    DOI: 10.22004/ag.econ.31489
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    References listed on IDEAS

    as
    1. Smith, Rodney B. W. & Shogren, Jason F., 2002. "Voluntary Incentive Design for Endangered Species Protection," Journal of Environmental Economics and Management, Elsevier, vol. 43(2), pages 169-187, March.
    2. Laffont, Jean-Jacques & Tirole, Jean, 1986. "Using Cost Observation to Regulate Firms," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 614-641, June.
    3. Chambers, Robert G., 1989. "On the Design of Agricultural Policy Mechanisms," Working Papers 197741, University of Maryland, Department of Agricultural and Resource Economics.
    4. Myerson, Roger B, 1979. "Incentive Compatibility and the Bargaining Problem," Econometrica, Econometric Society, vol. 47(1), pages 61-73, January.
    5. Guesnerie, Roger & Laffont, Jean-Jacques, 1984. "A complete solution to a class of principal-agent problems with an application to the control of a self-managed firm," Journal of Public Economics, Elsevier, vol. 25(3), pages 329-369, December.
    6. Groves, Theodore, 1973. "Incentives in Teams," Econometrica, Econometric Society, vol. 41(4), pages 617-631, July.
    7. James S. Shortle & James W. Dunn, 1986. "The Relative Efficiency of Agricultural Source Water Pollution Control Policies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(3), pages 668-677.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Johansson, Robert C., 2001. "Mechanism Design For Nutrient Trading Under Asymmetric Information," 2001 Annual meeting, August 5-8, Chicago, IL 20558, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Carmen Arguedas & Daan Soest, 2011. "Optimal Conservation Programs, Asymmetric Information and the Role of Fixed Costs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 50(2), pages 305-323, October.
    3. Line Hansen & Lars Hansen, 2014. "Can Non-point Phosphorus Emissions from Agriculture be Regulated Efficiently Using Input-Output Taxes?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(1), pages 109-125, May.
    4. Peterson, Jeffrey M. & Boisvert, Richard N., 2001. "Designing Nonpoint Source Pollution Policies With Limited Information About Both Risk Attitudes And Production Technology," 2001 Annual meeting, August 5-8, Chicago, IL 20720, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Johansson, Robert C. & Claassen, Roger & Peters, Mark, 2002. "New Conservation Initiatives In The 2002 Farm Bill," 2002 Annual meeting, July 28-31, Long Beach, CA 19760, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Peterson, Jeffrey M. & Boisvert, Richard N., 2001. "Designing Nonpoint Source Policies With Limited Information About Both Risk Attitudes and Production Technology," Working Papers 127661, Cornell University, Department of Applied Economics and Management.
    7. Patterson, Jeffrey M. & Boisvert, Richard N., 2002. "An Incentive Compatible Self-Compliant Pollution Policy and Asymmetric Information on Both Risk Attitudes and Technology," Working Papers 127318, Cornell University, Department of Applied Economics and Management.
    8. Johansson, Robert C., 2002. "Watershed Nutrient Trading Under Asymmetric Information," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 31(2), pages 1-13, October.
    9. Valcu, Adriana Mihaela, 2013. "Agricultural nonpoint source pollution and water quality trading: empirical analysis under imperfect cost information and measurement error," ISU General Staff Papers 201301010800004451, Iowa State University, Department of Economics.

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