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Prevention versus Treatment under Precautionary Regulation: A Case Study of Groundwater Contamination under Uncertainty

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  • Erik Lichtenberg
  • Tony M. Penn

Abstract

Policy discussions on agricultural pollution problems characterize prevention as more cost effective and precautionary than ex post treatment. We derive conditions under which treatment alone is more cost effective in situations involving multiple sources of emissions, multiple sites affected, and a commonly used precautionary approach to uncertainty. We also show that a greater degree of precaution can result in less reliance on prevention. An empirical case study indicates that treatment alone is the most cost-effective means of dealing with nitrate in most Maryland community water system wells. The use of leaching prevention measures is restricted to the most intensive poultry producing areas. The incremental cost of precaution is substantial. Copyright 2003, Oxford University Press.

Suggested Citation

  • Erik Lichtenberg & Tony M. Penn, 2003. "Prevention versus Treatment under Precautionary Regulation: A Case Study of Groundwater Contamination under Uncertainty," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(1), pages 44-58.
    • Handle: RePEc:oup:ajagec:v:85:y:2003:i:1:p:44-58
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    File URL: http://hdl.handle.net/10.1111/1467-8276.t01-2-00102
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    Cited by:

    1. Gray, Emily & Ancev, Tihomir & Drynan, Ross, 2011. "Coexistence of GM and non-GM crops with endogenously determined separation," Ecological Economics, Elsevier, vol. 70(12), pages 2486-2493.
    2. Eric Giraud-Héraud & Hakim Hammoudi & Louis-Georges Soler, 2006. "Food Safety, Liability and Collective Norms," Working Papers hal-00243034, HAL.
    3. Heikkila, Jaakko, 2006. "Economics of invasive alien species: pre-emptive versus reactive control," Discussion Papers 11865, MTT Agrifood Research Finland.

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