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Best Management Practices and Nutrient Reduction: An Integrated Economic-Hydrological Model of the Western Lake Erie Basin

Author

Listed:
  • Liu, Hongxing
  • Zhang, Wendong
  • Irwin, Elena
  • Kast, Jeffrey
  • Aloysius, Noel
  • Martin, Jay
  • Kalcic, Margaret

Abstract

We develop the first spatially integrated economic-hydrological model of the western Lake Erie basin that explicitly links economic models of farmers' field-level Best Management Practice (BMP) adoption choices with the Soil and Water Assessment Tool (SWAT) model to evaluate the cost-effectiveness of nutrient management policies. We quantify the tradeoffs between phosphorus reduction and policy costs and find that a hybrid policy that couples a fertilizer tax with cost-share payments for subsurface placement is the most cost-effective. We also find that economic adoption models can overstate the potential for nutrient reduction by ignoring biophysical complexities and thus demonstrate the importance of coupling economic and biophysical models for efficient policy design.

Suggested Citation

  • Liu, Hongxing & Zhang, Wendong & Irwin, Elena & Kast, Jeffrey & Aloysius, Noel & Martin, Jay & Kalcic, Margaret, 2019. "Best Management Practices and Nutrient Reduction: An Integrated Economic-Hydrological Model of the Western Lake Erie Basin," ISU General Staff Papers 201908010700001088, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:201908010700001088
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    Cited by:

    1. Shr, Yau-Huo (Jimmy) & Zhang, Wendong, 2024. "Omitted downstream attributes and the benefits of nutrient reductions: Implications for choice experiments," Ecological Economics, Elsevier, vol. 222(C).
    2. repec:ags:aaea22:335895 is not listed on IDEAS
    3. Yau-Huo Shr & Wendong Zhang, 2021. "Do Iowa Residents and Farmers Care about Improving Water Quality and Reducing Harmful Algal Blooms? Results from Two Household Surveys," Center for Agricultural and Rural Development (CARD) Publications 21-pb32, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    4. David Wolf & Sathya Gopalakrishnan & H. Allen Klaiber, 2022. "Staying afloat: The effect of algae contamination on Lake Erie housing prices," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(5), pages 1701-1723, October.
    5. Madhu Khanna, 2022. "Breakthroughs at the disciplinary nexus: Rewards and challenges for applied economists," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(2), pages 475-492, March.
    6. Liu, Yanan & Klaiber, Allen, 2022. "The Impact of Harmful Algal Blooms on Household Averting Expenditure," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322117, Agricultural and Applied Economics Association.
    7. Shr, Yau-Huo (Jimmy) & Zhang, Wendong, 2021. "Does Omitting Downstream Water Quality Change the Economic Benefits of Nutrient Reduction? Evidence from a Discrete Choice Experiment," ISU General Staff Papers 202101010800001067, Iowa State University, Department of Economics.
    8. Ancev, Tihomir & Carriquiry, Miguel A. & Frabasile, Franco & Saracho, Andres & Rosas, Juan Francisco, 2023. "The assessment of economic and environmental impacts of water use efficiency and farm practices through an economic and biophysical integrated model," 2023 Annual Meeting, July 23-25, Washington D.C. 335895, Agricultural and Applied Economics Association.
    9. Howard, Gregory E. & Zhang, Wendong & Valcu-Lisman, Adriana M., 2021. "Evaluating the Efficiency-Participation Tradeoff in Agricultural Conservation Programs: The Effect of Reverse Auctions, Spatial Targeting, and Higher Offered Payments," 2021 Annual Meeting, August 1-3, Austin, Texas 313926, Agricultural and Applied Economics Association.
    10. Souto, Augusto & Carriquiry, Miguel A. & Rosas, Juan Francisco, 2021. "Assessing the Impact of Agricultural Intensification on Water Pollution: An Integrated Model Assessment of the San Salvador Basin in Uruguay," 2021 Annual Meeting, August 1-3, Austin, Texas 314037, Agricultural and Applied Economics Association.
    11. Gregory Howard & Wendong Zhang & Adriana Valcu‐Lisman & Philip W. Gassman, 2024. "Evaluating the tradeoff between cost effectiveness and participation in agricultural conservation programs," American Journal of Agricultural Economics, John Wiley & Sons, vol. 106(2), pages 712-738, March.
    12. Yanan Liu & H. Allen Klaiber, 2023. "Don’t Drink the Water! The Impact of Harmful Algal Blooms on Household Averting Expenditure," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 86(1), pages 29-55, October.

    More about this item

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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