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Nonpoint Source Pollution Control under Incomplete and Costly Information

  • Y. Farzin
  • Jonathan Kaplan

We analyze the efficient management of nonpoint source pollution (NPS) under a limited pollution control budget and incomplete information. We focus on the tradeoff between data collection and pollution abatement efforts by incorporating information acquisition into a NPS pollution control model. Comparative static results show conditions under which (i) a favorable change in the abatement costs at one source may lead to an increase in the treatment level at all sources, and vice versa, (ii) an increase in data collection cost leads to an increase in data collection level, and (iii) an increase in the efficiency of information acquisition leads to a decrease in the level of data collection. More importantly, the model simulations illustrate that acquiring and exploiting information on heterogeneity of sediment loading distributions across polluting sources leads to a more efficient budget allocation and hence a greater reduction in pollution damage than would be the case without such information. Copyright Kluwer Academic Publishers 2004

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Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 28 (2004)
Issue (Month): 4 (August)
Pages: 489-506

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Handle: RePEc:kap:enreec:v:28:y:2004:i:4:p:489-506
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  1. Segerson, Kathleen, 1988. "Uncertainty and incentives for nonpoint pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 15(1), pages 87-98, March.
  2. Horan, Richard D. & Shortle, James S. & Abler, David G., 1998. "Ambient Taxes When Polluters Have Multiple Choices," Journal of Environmental Economics and Management, Elsevier, vol. 36(2), pages 186-199, September.
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  11. Babcock, Bruce A. & Lakshminarayan, P. G. & Wu, JunJie & Zilberman, David, 1996. "Economics of a Public Fund for Environmental Amenities (The)," Staff General Research Papers 1065, Iowa State University, Department of Economics.
  12. Zellner, A., 1988. "Optimal Information-Processing And Bayes' Theorem," Papers m8803, Southern California - Department of Economics.
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