IDEAS home Printed from
   My bibliography  Save this article

Evaluating Input Standards for Non‐Point Pollution Control under Firm Heterogeneity


  • Graeme J. Doole


The efficacy and cost of input standards for reducing nitrate pollution from New Zealand dairy production are evaluated. In contrast to previous studies, firm heterogeneity is explicitly considered through the novel integration of efficient techniques for the calibration and decomposition of large optimisation models. Nitrogen fertiliser application should not be targeted by policy given its minor role in determining emissions. In contrast, livestock intensity is an appropriate base for regulation given its strong correlation with pollutant load. Abatement cost increases as stocking rate declines, but this can be offset at low levels of regulation through utilising slack feed resources to improve per‐cow milk production. Both uniform and differentiated input standards based on livestock intensity achieve substantial decreases in pollutant load at moderate cost. However, because of disparity in the slopes of abatement cost curves across firms, a differentiated policy is more cost‐effective at the levels of regulation required to achieve key societal goals for improved water quality.

Suggested Citation

  • Graeme J. Doole, 2010. "Evaluating Input Standards for Non‐Point Pollution Control under Firm Heterogeneity," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(3), pages 680-696, September.
  • Handle: RePEc:bla:jageco:v:61:y:2010:i:3:p:680-696
    DOI: 10.1111/j.1477-9552.2010.00259.x

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Jordan F. Suter & Christian A. Vossler & Gregory L. Poe & Kathleen Segerson, 2008. "Experiments on Damage-Based Ambient Taxes for Nonpoint Source Polluters," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(1), pages 86-102.
    2. Fleming, R. A. & Adams, R. M., 1997. "The Importance of Site-Specific Information in the Design of Policies to Control Pollution," Journal of Environmental Economics and Management, Elsevier, vol. 33(3), pages 347-358, July.
    3. Alfons Weersink & John R. Livernois & Jason F. Shogren & James S. Shortle, 1998. "Economic Instruments and Environmental Policy in Agriculture," Canadian Public Policy, University of Toronto Press, vol. 24(3), pages 309-327, September.
    4. David J. Pannell, 2006. "Flat Earth Economics: The Far-reaching Consequences of Flat Payoff Functions in Economic Decision Making," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(4), pages 553-566.
    5. Newell, Richard G & Stavins, Robert N, 2003. "Cost Heterogeneity and the Potential Savings from Market-Based Policies," Journal of Regulatory Economics, Springer, vol. 23(1), pages 43-59, January.
    6. Suter, Jordan F. & Vossler, Christian A. & Poe, Gregory L. & Segerson, Kathleen, 2008. "AJAE Appendix: Experiments on Damage-Based Ambient Taxes for Nonpoint Source Polluters," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 90(1), pages 1-14, February.
    7. Xabadia, Angels & Goetz, Renan U. & Zilberman, David, 2008. "AJAE appendix for ‘The Gains from Differentiated Policies to Control Stock Pollution when Producers Are Heterogeneous’," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 90(4), pages 1-9, February.
    8. Basset-Mens, Claudine & Ledgard, Stewart & Boyes, Mark, 2009. "Eco-efficiency of intensification scenarios for milk production in New Zealand," Ecological Economics, Elsevier, vol. 68(6), pages 1615-1625, April.
    9. Richard E. Howitt, 1995. "Positive Mathematical Programming," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(2), pages 329-342.
    10. Renan-Ulrich Goetz & Hansjörg Schmid & Bernard Lehmann, 2006. "Determining the economic gains from regulation at the extensive and intensive margins," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 33(1), pages 1-30, March.
    11. Gloria E. Helfand & Brett W. House, 1995. "Regulating Nonpoint Source Pollution Under Heterogeneous Conditions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(4), pages 1024-1032.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. John Rendel & Alec Mackay & Paul Smale & Andrew Manderson & David Scobie, 2020. "Optimisation of the Resource of Land-Based Livestock Systems to Advance Sustainable Agriculture: A Farm-Level Analysis," Agriculture, MDPI, Open Access Journal, vol. 10(8), pages 1-23, August.
    2. Holland, Luke M. & Doole, Graeme J., 2014. "Implications of fairness for the design of nitrate leaching policy for heterogeneous New Zealand dairy farms," Agricultural Water Management, Elsevier, vol. 132(C), pages 79-88.
    3. Encarna Esteban & José Albiac, 2016. "Salinity Pollution Control in the Presence of Farm Heterogeneity — An Empirical Analysis," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(02), pages 1-20, June.
    4. Anastasiadis, Simon & Kerr, Suzi, 2012. "Mitigation and Heterogeneity in Management Practices on New Zealand Dairy Farms," 2012 Conference, August 31, 2012, Nelson, New Zealand 136039, New Zealand Agricultural and Resource Economics Society.
    5. Mack, Gabriele & Huber, Robert, 2017. "On-farm compliance costs and N surplus reduction of mixed dairy farms under grassland-based feeding systems," Agricultural Systems, Elsevier, vol. 154(C), pages 34-44.
    6. Daigneault, Adam & Greenhalgh, Suzie & Samarasinghe, Oshadhi, 2014. "A response to Doole and Marsh (2013) article: methodological limitations in the evaluation of policies to reduce nitrate leaching from New Zealand agriculture," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(2), April.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jageco:v:61:y:2010:i:3:p:680-696. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley Content Delivery). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.