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A note on the performance measure of conservation auctions

Author

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  • Latacz-Lohmann, Uwe
  • Schilizzi, Steven

Abstract

We argue that previous assessments of discriminatory-price conservation auctions may have systematically overestimated their performance relative to uniform-payment schemes due to an inappropriate counterfactual comparison. We demonstrate that the cost curve (and not the bid curve) is the relevant supply curve when a uniform payment is offered and provide a theoretically rigorous counterfactual based on that insight. We estimate that the performance of BushTender may have been overrated by more than 50%.

Suggested Citation

  • Latacz-Lohmann, Uwe & Schilizzi, Steven, 2011. "A note on the performance measure of conservation auctions," Working Papers 100885, University of Western Australia, School of Agricultural and Resource Economics.
  • Handle: RePEc:ags:uwauwp:100885
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    File URL: http://purl.umn.edu/100885
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    References listed on IDEAS

    as
    1. Uwe Latacz-Lohmann & Carel P. C. M. Hamsvoort, 1998. "Auctions as a Means of Creating a Market for Public Goods from Agriculture," Journal of Agricultural Economics, Wiley Blackwell, vol. 49(3), pages 334-345.
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    Keywords

    Auctions; procurement; tenders; conservation; economic experiments; model validation; plus: assessment method; agricultural policy; environmental policy; market-based instruments; Environmental Economics and Policy; Research Methods/ Statistical Methods; C91; C92; D44; Q24; Q28;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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