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Nonpoint Source Pollution Control Under Incomplete and Costly Information

Author

Listed:
  • Y.H. Farzin

    (Department of Agricultural and Resource Economics,University of California, Davis)

  • J.D. Kaplan

    (Department of Agricultural and Resource Economics,University of California, Davis)

Abstract

This paper analyses the efficient management of nonpoint source pollution (NPS) under limited pollution control budget and incomplete information inherent in NPS pollution. By incorporating information acquisition into a pollution control model, it focuses on the tradeoff between data collection and treatment efforts and derives conditions under which (i) a favourable change in the state of treatment cost at one site may lead to an increase in treatment level at another site, (ii) a higher data collection cost induces more data collection, and (iii) an increase in information productivity leads to an increase in the level of data collection. A numerical simulation of the model illustrates how in managing NPS pollution the value of information acquisition depends on the degree of heterogeneity of polluting sites.

Suggested Citation

  • Y.H. Farzin & J.D. Kaplan, 1999. "Nonpoint Source Pollution Control Under Incomplete and Costly Information," Working Papers 1999.32, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:1999.32
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    References listed on IDEAS

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    1. Kaplan, Jonathan D. & Howitt, Richard E. & Farzin, Y. Hossein, 2003. "An information-theoretical analysis of budget-constrained nonpoint source pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 46(1), pages 106-130, July.
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    9. Segerson, Kathleen, 1988. "Uncertainty and incentives for nonpoint pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 15(1), pages 87-98, March.
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    Citations

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    Cited by:

    1. Larry Karp, 2005. "Nonpoint Source Pollution Taxes and Excessive Tax Burden," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 31(2), pages 229-251, June.
    2. Johansson, Robert C., 2002. "Watershed Nutrient Trading Under Asymmetric Information," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 0(Number 2), pages 1-13, October.
    3. Millock, Katrin & Xabadia, Angels & Zilberman, David, 2012. "Policy for the adoption of new environmental monitoring technologies to manage stock externalities," Journal of Environmental Economics and Management, Elsevier, vol. 64(1), pages 102-116.
    4. Ramilan, Thiagarajah & Scrimgeour, Frank G., 2006. "Abatement Cost Heterogeneity and its Impact on Tradable Nitrogen Discharge Permits," 2006 Conference, August 24-25, 2006, Nelson, New Zealand 31972, New Zealand Agricultural and Resource Economics Society.
    5. Katrin Millock & Angels Xabadia & David Zilberman, 2009. "Investment Policy for New Environmental Monitoring Technologies to Manage Stock Externalities," Documents de travail du Centre d'Economie de la Sorbonne 09010, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    6. Anastasios Xepapadeas, 2011. "The Economics of Non-Point-Source Pollution," Annual Review of Resource Economics, Annual Reviews, vol. 3(1), pages 355-373, October.

    More about this item

    Keywords

    Nonpoint Source Pollution; Uncertainty; Costly information; Constrained pollution control budget;

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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