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The Effect of Cost-share Programs on Ground Water Exploitation and Nonpoint-source Pollution under Endogenous Technical Change

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  • Kim, C. S.
  • Guilfoos, Todd

Abstract

Empirical studies suggest that cost-share programs are unlikely to reduce exploitation of ground water and nonpoint-source pollution. By introducing an induced irrigation technology in our model, we find theoretically that the optimal amount of irrigation water and nitrogen fertilizer increases (decreases) when the increased rate of the marginal net economic benefits from their use with an induced irrigation technology exceeds (is less than) an increase in the rate of irrigation efficiency. Our results suggest that producers should use relatively more irrigation water and fertilizer when greater quantities of high-value crops are grown because producers will adopt improved irrigation technologies for such crops.

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  • Kim, C. S. & Guilfoos, Todd, 2016. "The Effect of Cost-share Programs on Ground Water Exploitation and Nonpoint-source Pollution under Endogenous Technical Change," Agricultural and Resource Economics Review, Cambridge University Press, vol. 45(2), pages 394-417, August.
    • Handle: RePEc:cup:agrerw:v:45:y:2016:i:02:p:394-417_00
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    Cited by:

    1. Gabriel S. Sampson & Edward D. Perry, 2019. "Peer effects in the diffusion of water‐saving agricultural technologies," Agricultural Economics, International Association of Agricultural Economists, vol. 50(6), pages 693-706, November.

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