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Costs of Nitrogen Runoff for Rural Water Utilities: A Shadow Cost Approach

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  • Roberto Mosheim
  • Marc Ribaudo

Abstract

This paper explores the interactions among scale and density economies, productive efficiency, water quality, and customer characteristics, and their impact on the costs of delivering treated drinking water. Implicit benefits of nitrogen abatement are also derived and hypothesis tests concerning their hypothesized drivers are conducted. Key findings are that nitrogen removal costs increase with rising raw water nitrogen concentration coming from agricultural activities, and that network density and system size matter in determining average total costs of community water systems. Merging water systems to take advantage of scale economies may be difficult due to the heterogeneity of the sector, however.

Suggested Citation

  • Roberto Mosheim & Marc Ribaudo, 2017. "Costs of Nitrogen Runoff for Rural Water Utilities: A Shadow Cost Approach," Land Economics, University of Wisconsin Press, vol. 93(1), pages 12-39.
    • Handle: RePEc:uwp:landec:v:93:y:2017:i:1:p:12-39
    Note: DOI: 10.3368/le.93.1.12
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    File URL: http://le.uwpress.org/cgi/reprint/93/1/12
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    Citations

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    Cited by:

    1. Roberto Mosheim & Robin C. Sickles, 2021. "Spatial effects of nutrient pollution on drinking water production," Empirical Economics, Springer, vol. 60(6), pages 2741-2764, June.
    2. Price, James I. & Heberling, Matthew T., 2018. "The Effects of Source Water Quality on Drinking Water Treatment Costs: A Review and Synthesis of Empirical Literature," Ecological Economics, Elsevier, vol. 151(C), pages 195-209.

    More about this item

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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