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Watershed-Scale Economic And Environmental Tradeoffs Incorporating Risks: A Target Motad Approach

Author

Listed:
  • Qiu, Zeyuan
  • Prato, Anthony A.
  • Kaylen, Michael S.

Abstract

This paper evaluates the economic and environmental tradeoffs at watershed scale by incorporating both economic and environmental risks in agricultural production. The Target MOTAD model is modified by imposing a probability-constrained objective function to capture the yield uncertainty caused by random allocation of farming systems to soil types and by introducing environmental targets to incorporate environmental risk due to random storm events. This framework is used to determine the tradeoffs frontier between watershed net return and sediment yield and nitrogen concentration in runoff in Goodwater Creek watershed, Missouri. The frontier is significantly affected by environmental risk preference.

Suggested Citation

  • Qiu, Zeyuan & Prato, Anthony A. & Kaylen, Michael S., 1998. "Watershed-Scale Economic And Environmental Tradeoffs Incorporating Risks: A Target Motad Approach," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 27(2), pages 1-10, October.
    • Handle: RePEc:ags:arerjl:31523
    DOI: 10.22004/ag.econ.31523
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    References listed on IDEAS

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    1. Mark L. Teague & Daniel J. Bernardo & Harry P. Mapp, 1995. "Farm-Level Economic Analysis Incorporating Stochastic Environmental Risk Assessment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(1), pages 8-19.
    2. G. C. Van Kooten & Ward P. Weisensel & Duangdao Chinthammit, 1990. "Valuing Trade-Offs between Net Returns and Stewardship Practices: The Case of Soil Conservation in Saskatchewan," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(1), pages 104-113.
    3. A. Charnes & W. W. Cooper, 1963. "Deterministic Equivalents for Optimizing and Satisficing under Chance Constraints," Operations Research, INFORMS, vol. 11(1), pages 18-39, February.
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    Cited by:

    1. Howry, Sierra S. & Stoecker, Arthur L. & Storm, Daniel E. & White, Michael J., 2008. "Economic Analysis of Management Practices to Reduce Phosphorus Load to Lake Eucha and Spavinaw," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6793, Southern Agricultural Economics Association.
    2. Zeyuan Qiu, 2005. "Using Multi-Criteria Decision Models to Assess the Economic and Environmental Impacts of Farming Decisions in an Agricultural Watershed," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(2), pages 229-244.
    3. Ekman, Sone, 2002. "Cost-Effective Farm-Level Nitrogen Abatement in the Presence of Environmental and Economic Risk," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24860, European Association of Agricultural Economists.

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