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Modeling Transactions Costs in a Regional Transferable Discharge Permit System for Phosphorus Runoff

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  • Mitchell, David M.
  • Willett, Keith

Abstract

This paper examines the construction and implementation of a regional transferable discharge permit system for phosphorus runoff from agricultural-related sources. The impact on behavior at the firm level is also examined. Results indicate that firms may respond to binding environmental constraints by both engaging in the trade of discharge permits and decreasing the output that can cause phosphorus runoff. The criticisms within the literature of building transferable discharge permit systems that ignore transactions costs are also addressed.

Suggested Citation

  • Mitchell, David M. & Willett, Keith, 2012. "Modeling Transactions Costs in a Regional Transferable Discharge Permit System for Phosphorus Runoff," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 42(2), pages 1-13.
    • Handle: RePEc:ags:jrapmc:143774
    DOI: 10.22004/ag.econ.143774
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    References listed on IDEAS

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    Cited by:

    1. Dionisios Latinopoulos & Eftichios Sartzetakis, 2013. "Using tradable water permits in irrigated agriculture," Discussion Paper Series 2013_04, Department of Economics, University of Macedonia, revised Dec 2013.

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