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

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

Abstract

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.

Suggested Citation

  • 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
    DOI: 10.22004/ag.econ.6192
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    References listed on IDEAS

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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.
    2. Johansson, Robert C., 2006. "Participant Bidding Enhances Cost Effectiveness," Economic Brief 34085, United States Department of Agriculture, Economic Research Service.
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    Cited by:

    1. Glebe, Thilo W., 2011. "Tendering conservation contracts: Should information on environmental benefits be disclosed or concealed?," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114625, European Association of Agricultural Economists.

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