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Toward The Efficient Production Of The Discommodity Of Animal Odor: A Hedonic Price Approach To Economies Of Scale

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  • Thomas, Michael H.
  • Goldsmith, Peter D.
  • Milla, Katherine
  • Stratis, Nicholas
  • Bruton, Natasha

Abstract

Controversy surrounding confined animal feeding operations (CAFO) is becoming more commonplace. In several regions of the country CAFOs and local residents have had disputes over odors emanating from these operations. Viewing the CAFO as jointly producing products with utility (e.g., meat) and disutility (e.g., foul odor), it is possible to determine an efficient level of production for both products that is market-based. The authors propose a hedonic price model based upon real-estate transactions adjacent to CAFOs to establish a market-based estimate of the degree and extent of odor disutility. Using the results of the hedonic model, the authors suggest that a simple model of odor dispersal can be used to address the issue of economies of scale and the production of the disutility odor. Specifically, the final outcome should reveal if there is more or less disutility produced with an industry that is intensively or extensively managed.

Suggested Citation

  • Thomas, Michael H. & Goldsmith, Peter D. & Milla, Katherine & Stratis, Nicholas & Bruton, Natasha, 2001. "Toward The Efficient Production Of The Discommodity Of Animal Odor: A Hedonic Price Approach To Economies Of Scale," 2001 Annual meeting, August 5-8, Chicago, IL 20629, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea01:20629
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    References listed on IDEAS

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    1. Raymond B. Palmquist & Fritz M. Roka & Tomislav Vukina, 1997. "Hog Operations, Environmental Effects, and Residential Property Values," Land Economics, University of Wisconsin Press, vol. 73(1), pages 114-124.
    2. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    3. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
    4. Freeman, A Myrick, III, 1974. "Air Pollution and Property Values: A Further Comment," The Review of Economics and Statistics, MIT Press, vol. 56(4), pages 554-556, November.
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    Keywords

    Livestock Production/Industries;

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