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Using Field-level Characteristics as Proxy Measures to Test for the Presence of Economies of Scale in Nonpoint Pollution Control

Published online by Cambridge University Press:  15 September 2016

Arthur J. Caplan ,
John Gilbert  and
Devalina Chatterjee
Arthur J. Caplan*
Affiliation:
Department of Applied Economics
John Gilbert
Affiliation:
Department of Economics and Finance at Utah State University
Devalina Chatterjee
Affiliation:
Department of Economics at Stanford University
*
Corresponding Author: Department of Applied Economics, Utah State University, 3530 Old Main Hill, Logan, UT 84322–3530, Phone 435.797.0775, Email arthur.caplan@usu.edu.
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Abstract

We use parametric and nonparametric methods to estimate correlations between average control cost and three field-level characteristics—field size and delivered phosphorous per field and per acre—as proxies for economies of scale in controlling nonpoint pollution. We combine load and delivery-ratio estimates for more than 12,000 fields in the Bear River Basin, Utah, with estimates of control costs and effectiveness of management practices from the literature. Results suggest a negative relationship between control cost and delivered phosphorous per field and per acre. Ranking fields by phosphorous load therefore prioritizes management-practice subsidies by economies of scale.

Keywords

economies of scalenonpoint-source pollutiondelivered loadcontrol costs
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 42 , Issue 2 , August 2013 , pp. 365 - 386
Copyright
Copyright © 2013 Northeastern Agricultural and Resource Economics Association 

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