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Measuring the Marginal Cost of Nonuniform Environmental Regulations


  • David L. Sunding


A method is presented for measuring the marginal welfare cost of environmental regulations affecting agriculture. The method incorporates output market effects and recognizes diversity in production conditions among crops, regions, and seasons. An important advantage of the method is that only regional outputs and changes in regional production costs are needed to calculate deadweight loss, thus simplifying the measurement of welfare changes. This feature of the model is significant since the complexity and substantial data requirements of most existing impact models cause many environmental regulations to be enacted with inadequate analysis of their economic impacts. The method also disaggregates welfare impacts by crop, place, and time, thus encouraging the implementation of nonuniform interventions that achieve a given level of environmental quality more efficiently than uniform policies. Copyright 1996, Oxford University Press.

Suggested Citation

  • David L. Sunding, 1996. "Measuring the Marginal Cost of Nonuniform Environmental Regulations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(4), pages 1098-1107.
  • Handle: RePEc:oup:ajagec:v:78:y:1996:i:4:p:1098-1107

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    Cited by:

    1. Roosen, Jutta, 1999. "Economic analysis of pesticide regulation in the U.S. apple industry," ISU General Staff Papers 1999010108000013606, Iowa State University, Department of Economics.
    2. Azzeddine Azzam & Gibson Nene & Karina Schoengold, 2015. "Hog Industry Structure and the Stringency of Environmental Regulation," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 63(3), pages 333-358, September.
    3. James Shortle & David Abler & Richard Horan, 1998. "Research Issues in Nonpoint Pollution Control," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 11(3), pages 571-585, April.
    4. Nene, Gibson & Azzam, Azzeddine M. & Schoengold, Karina, 2009. "Environmental Regulations and the Structure of U.S. Hog Farms," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49395, Agricultural and Applied Economics Association.
    5. Hennessy, David A. & Roosen, Jutta, 1999. "An Equilibrium Analysis Of The Impact Of Antibiotics Bans On Investment In Apple Orchards," 1999 Annual meeting, August 8-11, Nashville, TN 21698, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Lichtenberg, Erik, 2002. "Agriculture and the environment," Handbook of Agricultural Economics,in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 2, chapter 23, pages 1249-1313 Elsevier.
    7. Heimlich, Ralph E. & Claassen, Roger, 1998. "Agricultural Conservation Policy At A Crossroads," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 27(1), April.
    8. Roosen, Jutta & Hennessy, David A., 2001. "An Equilibrium Analysis Of Antibiotics Use And Replanting Decisions In Apple Production," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(02), December.
    9. Johansson, Robert C. & Kara, Erdal & Ribaudo, Marc, 2006. "On how environmental stringency influences BMP adoption," 2006 Annual meeting, July 23-26, Long Beach, CA 21207, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Bjornson, Bruce & Klipfel, Jason, 2000. "Farm Equipment Industry Performance: Past And Future," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 3(01).

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