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Why do transaction costs of agricultural policies vary?

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  • Per Kristian Rørstad
  • Arild Vatn
  • Valborg Kvakkestad

Abstract

Policy related transaction costs (TCs) is an important issue when evaluating different policy options. However, TCs are often not taken into account in policy evaluations, but may be as important for efficiency as the direct production costs. Different policies may result in different TCs, and the main aim of this article is to explore possible reasons for these differences. We compare the level of TCs for 12 different agricultural policy measures in Norway, and we analyze the causes of the differences along three different dimensions: asset specificity, frequency, and point of policy application. At the national level we find that all three dimensions are of importance when explaining the differences, while variation in TCs incurred by farmers are mainly due to differences in point of policy application and asset specificity. Data show that direct price support has the lowest TCs, while more direct payments for environmental amenities has the highest. Copyright 2007 International Association of Agricultural Economists.

Suggested Citation

  • Per Kristian Rørstad & Arild Vatn & Valborg Kvakkestad, 2007. "Why do transaction costs of agricultural policies vary?," Agricultural Economics, International Association of Agricultural Economists, vol. 36(1), pages 1-11, January.
  • Handle: RePEc:bla:agecon:v:36:y:2007:i:1:p:1-11
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    Citations

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    Cited by:

    1. Jussi Lankoski & Erik Lichtenberg & Markku Ollikainen, 2010. "Agri-Environmental Program Compliance in a Heterogeneous Landscape," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 47(1), pages 1-22, September.
    2. Nilsson, Fredrik Olof Laurentius, 2008. "Applied economics of multifunctional agriculture," Department of Economics publications 1768, Swedish University of Agricultural Sciences, Department of Economics.
    3. Schader, Christian & Sanders, Jurn & Offermann, Frank & Lampkin, Nicolas & Stolze, Matthias, 2008. "Cost-Effectiveness Evaluation of Swiss Agri-Environmental Measures on Sector Level," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6604, European Association of Agricultural Economists.
    4. Bertoni, Danilo & Olper, Alessandro, 2012. "The Political Economy Of Agri-Environmental Measures: An Empirical Assessment At The Eu Regional Level," APSTRACT: Applied Studies in Agribusiness and Commerce, AGRIMBA, vol. 6.
    5. Coggan, Anthea & Buitelaar, Edwin & Whitten, Stuart & Bennett, Jeff, 2013. "Factors that influence transaction costs in development offsets: Who bears what and why?," Ecological Economics, Elsevier, vol. 88(C), pages 222-231.
    6. Johan F.M.Swinnen & Alessandro Olper & Thijs Vandemoortele, 2011. "The Political Economy of Policy Instrument Choice: Theory and Evidence from Agricultural Policies," LICOS Discussion Papers 27911, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    7. McCann, Laura, 2013. "Transaction costs and environmental policy design," Ecological Economics, Elsevier, vol. 88(C), pages 253-262.
    8. repec:eee:forpol:v:80:y:2017:i:c:p:141-149 is not listed on IDEAS
    9. Aude Ridier & Charilaos Kephaliacos & Francoise Carpy-Goulard, 2011. "Private transaction costs and environmental cross compliance in a crop region of Southwestern France," International Journal of Agricultural Resources, Governance and Ecology, Inderscience Enterprises Ltd, vol. 9(1/2), pages 68-79.
    10. Weber, Anja Michaela, 2011. "Why do Farmers Spend Different Amounts of Transaction Costs in Agri-Environmental Schemes?," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 115738, European Association of Agricultural Economists.
    11. Farley, Joshua & Costanza, Robert, 2010. "Payments for ecosystem services: From local to global," Ecological Economics, Elsevier, vol. 69(11), pages 2060-2068, September.
    12. Nilsson, Fredrik O. L., 2007. "Transaction costs of agri-environmental policy measures," Department of Economics publications 3100, Swedish University of Agricultural Sciences, Department of Economics.
    13. Vogt, Nora & Bizer, Kilian, 2013. "Lock-in effects in competitive bidding schemes for payments for ecosystem services: Revisiting the fundamental transformation," Center for European, Governance and Economic Development Research Discussion Papers 158, University of Goettingen, Department of Economics.
    14. Vatn, Arild, 2010. "An institutional analysis of payments for environmental services," Ecological Economics, Elsevier, vol. 69(6), pages 1245-1252, April.
    15. Weber, Anja Michaela & Nuppenau, Ernst-August, 2010. "Transaction costs in agri-environmental schemes: the principal-agent-point of view," 118th Seminar, August 25-27, 2010, Ljubljana, Slovenia 94919, European Association of Agricultural Economists.
    16. Hagedorn, Konrad & Beckmann, Volker, 2010. "Institutionen der Nachhaltigkeit – Der Nobelpreis für Wirtschaft 2009 und seine Bedeutung für die Agrarökonomie," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 59(1).
    17. Coggan, Anthea & Whitten, Stuart M. & Bennett, Jeff, 2010. "Influences of transaction costs in environmental policy," Ecological Economics, Elsevier, vol. 69(9), pages 1777-1784, July.
    18. Mettepenningen, E. & Beckmann, V. & Eggers, J., 2011. "Public transaction costs of agri-environmental schemes and their determinants--Analysing stakeholders' involvement and perceptions," Ecological Economics, Elsevier, vol. 70(4), pages 641-650, February.
    19. Anne GASSIAT & Sylvain ROUSSET & Frèdèric ZAHM, 2011. "Improving water quality with a territorial agro-environmental policy? Insights from the new generation AES in South-West France," ERSA conference papers ersa10p1569, European Regional Science Association.
    20. Phan, Thu-Ha Dang & Brouwer, Roy & Davidson, Marc David, 2017. "A Global Survey and Review of the Determinants of Transaction Costs of Forestry Carbon Projects," Ecological Economics, Elsevier, vol. 133(C), pages 1-10.
    21. Mettepenningen, Evy & Beckmann, Volker & Eggers, Jorg, 2008. "Public transaction cost of agri-environmental schemes and its determinants - Analysing stakeholders’ involvement and perceptions," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44321, European Association of Agricultural Economists.
    22. Huong, Tran Thi Thu & Zeller, Manfred & Hoanh, Chu Thai, 0. "The ‘Five Million Hectare Reforestation Program’ in Vietnam: An Analysis of its Implementation and Transaction Costs - A Case Study in Hoa Binh Province," Quarterly Journal of International Agriculture, Humboldt-Universität zu Berlin, vol. 53.

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