Journal
AMERICAN JOURNAL OF AGRICULTURAL ECONOMICS
Volume 96, Issue 1, Pages 67-91Publisher
WILEY
DOI: 10.1093/ajae/aat053
Keywords
bio-economic modeling; calibration; nitrate; nitrogen tax; nitrous oxide; nonpoint source pollution; positive mathematical programming; C6; Q1; Q5
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Funding
- David and Lucile Packard Foundation
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We develop a programming model of crop production to predict the effects of environmental policies on agriculture and the environment. The model is calibrated against acreages, yields, and exogenous supply elasticities following positive mathematical programming. In addition, crop production functions are calibrated to yield elasticities with respect to nitrogen and irrigation obtained from a biogeochemical model. We study the effects of a nitrogen tax in Yolo County, California, intended to mitigate nitrogen pollution from field crops. The behavioral and environmental responses to the tax are largely due to intensive margin adjustments. Sizable reductions in nitrate leaching are achieved at a low social cost.
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