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Cost-Responsiveness of Conservation Practice Adoption: A Revealed Preference Approach

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  • Lichtenberg, Erik

Abstract

While there is current interest in reorienting agricultural policy toward environmental and resource conservation goals, relatively little is known about the influence of cost on conservation adoption decisions or about how farmers combine multiple practices into an overall conservation package. Using farmer survey data combined with information on standard unit installation costs, this study estimates latent demand models for seven on-farm conservation practices. All of the practices exhibit downward-sloping demand. Topographical variations in adoption conform to expectations. The estimation results suggest that cost sharing should have substantial effects on the adoption of several practices, and indicate strong complementarity among others.

Suggested Citation

  • Lichtenberg, Erik, 2004. "Cost-Responsiveness of Conservation Practice Adoption: A Revealed Preference Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(03), December.
  • Handle: RePEc:ags:jlaare:30920
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    File URL: http://purl.umn.edu/30920
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    Cited by:

    1. Jolejole, Christina B. & Swinton, Scott M. & Robertson, G. Philip & Syswerda, Sara P., 2009. "Profitability and Environmental Stewardship for Row Crop Production: Are There Trade-offs?," 2009 Conference, August 16-22, 2009, Beijing, China 50920, International Association of Agricultural Economists.
    2. Diane P. Dupont, 2010. "Cost-Sharing Incentive Programs for Source Water Protection: The Grand River's Rural Water Quality Program," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(s1), pages 481-496, December.
    3. Robert J. Sheeder & Gary D. Lynne, 2011. "Empathy-Conditioned Conservation: “Walking in the Shoes of Others” as a Conservation Farmer," Land Economics, University of Wisconsin Press, vol. 87(3), pages 433-452.
    4. Diane P. Dupont, 2009. "Cost-sharing Incentive Programs for Source Water Protection: The Grand River’s Rural Water Quality Program," Working Papers 0905, Brock University, Department of Economics, revised Jun 2009.
    5. Bergtold, Jason S. & Duffy, Patricia A. & Hite, Diane & Raper, Randy L., 2012. "Demographic and Management Factors Affecting the Adoption and Perceived Yield Benefit of Winter Cover Crops in the Southeast," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 44(01), February.
    6. Hand, Michael S. & Nickerson, Cynthia J., 2009. "The Role of Cost-Share Rates and Prices on the Size of Conservation Investments in EQIP," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49257, Agricultural and Applied Economics Association.
    7. Fleming, Patrick & Lichtenberg, Erik & Newburn, David A., 2015. "Agricultural Cost Sharing and Conservation Practices for Nutrient Reduction in the Chesapeake Bay Watershed," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205762, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    8. Chouinard, Hayley H. & Wandschneider, Philip R. & Paterson, Tobias, 2016. "Inferences from sparse data: An integrated, meta-utility approach to conservation research," Ecological Economics, Elsevier, vol. 122(C), pages 71-78.
    9. Fleming, Patrick, 2014. "A Model of Agricultural Land Use, Costs, and Water Quality in the Chesapeake Bay," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170373, Agricultural and Applied Economics Association.
    10. Bergtold, Jason S. & Duffy, Patricia A. & Hite, Diane & Raper, Randy L., 2008. "Demographic and Management Factors Affecting the Perceived Benefit of Winter Cover Crops in the Southeast," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6424, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Claassen, Roger & Cattaneo, Andrea & Johansson, Robert, 2008. "Cost-effective design of agri-environmental payment programs: U.S. experience in theory and practice," Ecological Economics, Elsevier, vol. 65(4), pages 737-752, May.
    12. Ribaudo, Marc & Delgado, Jorge & Hansen, LeRoy T. & Livingston, Michael J. & Mosheim, Roberto & Williamson, James M., 2011. "Nitrogen in Agricultural Systems: Implications for Conservation Policy," Economic Research Report 118022, United States Department of Agriculture, Economic Research Service.
    13. Peterson, Hikaru Hanawa & Barkley, Andrew P. & Chacon-Cascante, Adriana & Kastens, Terry L., 2012. "The Motivation for Organic Grain Farming in the United States: Profits, Lifestyle, or the Environment?," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 44(02), May.
    14. Canales, Elizabeth & Bergtold, Jason S. & Williams, Jeffery & Peterson, Jeffrey, 2015. "Estimating farmers’ risk attitudes and risk premiums for the adoption of conservation practices under different contractual arrangements: A stated choice experiment," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205640, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    15. Boyer, Christopher N. & Lambert, Dayton M. & Velandia, Margarita & English, Burton C. & Robert, Roland K. & Larson, James A. & Larkin, Sherry L. & Paudel, Krishna P. & Reeves, Jeanne M., 2016. "Cotton Producer Awareness and Participation in Cost-Sharing Programs for Precision Nutrient-Management Technology," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(1), January.
    16. Rees, Gwen & Stephenson, Kurt & Taylor, Daniel B., 2015. "The Impact of Transaction Costs and Differential BMP Adoption Rates on the Cost of Reducing Agricultural Nonpoint Source Pollution in Virginia," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196834, Southern Agricultural Economics Association.
    17. Wade, Tara & Kurkalova, Lyubov & Secchi, Silvia, 2016. "Modeling Field-Level Conservation Tillage Adoption with Aggregate Choice Data," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(2), May.
    18. Obubuafo, Joyce & Gillespie, Jeffrey M. & Paudel, Krishna P. & Kim, Seon-Ae, 2008. "Awareness of and Application to the Environmental Quality Incentives Program By Cow–Calf Producers," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 40(01), April.
    19. Reeling, Carson J. & Weir, A.E. & Swinton, Scott M. & Hayes, R.C., 2012. "A comparative breakeven net return threshold to guide development of conservation technologies with application to perennial wheat," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124723, Agricultural and Applied Economics Association.

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