Measuring the marginal cost of nonuniform environmental regulations

• Published in: American journal of agricultural economics Vol. 78; no. 4; pp. 1098 - 1107
• Main Author: Sunding, David L.
• Format: Journal Article
• Language: English
• Published: Menasha, Wis Oxford University Press 01.11.1996; American Agricultural Economics Association; American Farm Economic Association; Blackwell Publishing Ltd
• Subjects: Agricultural economics; Agricultural production; AGRICULTURAL REGIONS; Agricultural seasons; Agriculture; ANALISIS DE COSTOS; ANALISIS MARGINAL; ANALYSE DES COUTS; ANALYSE MARGINALE; CALIFORNIA; CALIFORNIE; Capital costs; COMPORTAMIENTO ECONOMICO; COMPORTEMENT ECONOMIQUE; COST ANALYSIS; COSTOS DE PRODUCCION; Costs; COUT DE PRODUCTION; Crop economics; Crop production; Crops; distributional impacts; ECONOMIA DE BIENESTAR; ECONOMIC BEHAVIOUR; ECONOMIC GEOGRAPHY; ECONOMIC IMPACT; Economic models; Economic regulation; ECONOMIE DU BIEN ETRE; Endangered & extinct species; ENVIRONMENTAL POLICIES; Environmental policy; ENVIRONMENTAL PROTECTION; Environmental quality; Environmental regulation; Environmental regulations; Farming; GEOGRAFIA ECONOMICA; GEOGRAPHIE ECONOMIQUE; Humidity; Insecticides; MARGINAL ANALYSIS; Marginal costs; Methods; microparameter models; PERIODICIDAD; PERIODICITE; PERIODICITY; Pest control; Pesticides; POLITICA AMBIENTAL; POLITIQUE DE L'ENVIRONNEMENT; PRODUCTION COSTS; PROTECCION AMBIENTAL; PROTECTION DE L'ENVIRONNEMENT; Public assistance programs; Q150; Q280; Regions; REGLAMENTACIONES; REGLEMENTATION; Regulation; REGULATIONS; SEASONALITY; Seasons; Water quality; welfare analysis; WELFARE ECONOMICS; environmental regulations; welfare analysis; microparameter models; Q280; distributional impacts; Q150
• ISSN: 0002-9092; 1467-8276
• DOI: 10.2307/1243866

A method is presented for measuring the marginal welfare cost of environmental regulations affecting agriculture. The method incorporates output market effects and recognizes diversity in production conditions among crops, regions, and seasons. An important advantage of the method is that only regional outputs and changes in regional production costs are needed to calculate deadweight loss, thus simplifying the measurement of welfare changes. This feature of the model is significant since the complexity and substantial data requirements of most existing impact models cause many environmental regulations to be enacted with inadequate analysis of their economic impacts. The method also disaggregates welfare impacts by crop, place, and time, thus encouraging the implementation of nonuniform interventions that achieve a given level of environmental quality more efficiently than uniform policies.