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Transaction Costs of Environmental Policies and Returns to Scale: The Case of Comprehensive Nutrient Management Plans

  • Laura M.J. McCann
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    Comprehensive nutrient management plans are being promoted to reduce excess nutrient applications on livestock farms to improve water quality. Development of these plans has been shown to exhibit increasing returns to scale but these costs did not include farmer time. Data from a farmer survey are used to characterize the magnitude and determinants of the transaction costs of comprehensive nutrient management plan development in the Midwest. The analyses confirm that the time spent by farmers exhibits increasing returns to scale. Ignoring the hours spent by farmers on plan development underestimates time requirements by approximately 10%. Copyright 2009 Agricultural and Applied Economics Association

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    Article provided by Agricultural and Applied Economics Association in its journal Review of Agricultural Economics.

    Volume (Year): 31 (2009)
    Issue (Month): 3 (09)
    Pages: 561-573

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    Handle: RePEc:oup:revage:v:31:y:2009:i:3:p:561-573
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