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Reverse Auctions: Are they a Cost-Effective Alternative to Traditional Agricultural Conservation Spending?


  • Greenhalgh, Suzie
  • Taylor, Michael A.
  • Selman, Mindy
  • Guiling, Jenny


Agricultural practices continue to degrade water quality and ecosystems worldwide. In the United States, programs like the Department of Agriculture’s (USDA) Environmental Quality Incentive Program (EQIP) target the voluntary adoption of agricultural best management practices (BMPs). Demand for these programs has historically exceeded available funding, so allocating funding to achieve the greatest environmental outcome is essential. In recent years, economists have argued that market mechanisms should be incorporated within government programs to improve their cost-effectiveness. This article presents the results of a reverse auction to allocate funding to reduce phosphorus losses from farms, and compares the results with EQIP funded contracts in the same watershed.

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  • Greenhalgh, Suzie & Taylor, Michael A. & Selman, Mindy & Guiling, Jenny, 2008. "Reverse Auctions: Are they a Cost-Effective Alternative to Traditional Agricultural Conservation Spending?," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6192, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea08:6192

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    1. Cattaneo, Andrea & Claassen, Roger & Johansson, Robert C. & Weinberg, Marca, 2005. "Flexible Conservation Measures on Working Land: What Challenges Lie Ahead?," Economic Research Report 7248, United States Department of Agriculture, Economic Research Service.
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    Resource /Energy Economics and Policy;

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