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Amenity Benefits and Public Policy: An Application to the Connecticut Dairy Sector

Published online by Cambridge University Press:  28 April 2015

Rigoberto A. Lopez ,
Marilyn A. Altobello  and
Farhed A. Shah
Rigoberto A. Lopez
Affiliation:
Department of Agricultural and Resource Economics, University of Connecticut, Starrs, CT. 06269-4021
Marilyn A. Altobello
Affiliation:
Department of Agricultural and Resource Economics, University of Connecticut, Starrs, CT. 06269-4021
Farhed A. Shah
Affiliation:
Department of Agricultural and Resource Economics, University of Connecticut, Starrs, CT. 06269-4021
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Abstract

This article develops a conceptual framework for analyzing the role of state-level policies towards the dairy sector in the presence of farmland amenity benefits, and applies it to Connecticut. Milk supply, demand and amenity benefit functions are estimated, and three exogenously determined milk prices are considered. The empirical findings show, under each price scenario, the extent to which land is underallocated to the dairy sector if amenity benefits are ignored. Analysis of policy options reveals that a partial production cost subsidy represents the least-cost alternative for attaining the socially optimal solution for the region.

Keywords

amenity benefitspolicydairyland useopen space
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 26 , Issue 2 , December 1994 , pp. 485 - 496
Copyright
Copyright © Southern Agricultural Economics Association 1994

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