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Environmental Regulation and Innovation Offsets in the Bluegrass Seed Industry

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  • Aaron G. Benson
  • C. Richard Shumway

Abstract

Burning bluegrass seed stubble is an important production practice that, among other benefits, increases production and stand life of this perennial crop. Despite economic forecasts that higher production costs from the 1996 state ban on seed stubble burning would reduce Washington production by up to 30%, output in the years 1998–2005 was nearly two-thirds higher than in any previous eight-year period. This study seeks to explain why that paradoxical behavior occurred. This study puts forward and systematically tests several hypotheses. The only hypothesis with any support, innovation offsets, is examined by an assessment of contemporaneous innovations and by corroborative statistical evidence.

Suggested Citation

  • Aaron G. Benson & C. Richard Shumway, 2009. "Environmental Regulation and Innovation Offsets in the Bluegrass Seed Industry," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 31(2), pages 231-246.
    • Handle: RePEc:oup:revage:v:31:y:2009:i:2:p:231-246.
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    File URL: http://hdl.handle.net/10.1111/j.1467-9353.2009.01435.x
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    1. Houck, James P., 1976. "Analyzing the Impact of Government Programs on Crop Acreage," Technical Bulletins 158119, United States Department of Agriculture, Economic Research Service.
    2. Karen Palmer & Wallace E. Oates & Paul R. Portney & Karen Palmer & Wallace E. Oates & Paul R. Portney, 2004. "Tightening Environmental Standards: The Benefit-Cost or the No-Cost Paradigm?," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 3, pages 53-66, Edward Elgar Publishing.
    3. Marcus Wagner, 2004. "The Porter Hypothesis Revisited: A Literature Review of Theoretical Models and Empirical Tests," Public Economics 0407014, University Library of Munich, Germany.
    4. James A. Chalfant, 1984. "Comparison of Alternative Functional Forms with Application to Agricultural Input Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(2), pages 216-220.
    5. Ruttan, Vernon W, 1997. "Induced Innovation, Evolutionary Theory and Path Dependence:," Economic Journal, Royal Economic Society, vol. 107(444), pages 1520-1529, September.
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