Paradox for Agro-Environmental Land Policy, A

David A. Hennessy and Hongli Feng

Staff General Research Papers from Iowa State University, Department of Economics

Abstract: A regulator with a fixed budget to spend on securing environmental benefits from farmed land has to choose between how many acres to enroll and the extent of benefits to require of each enrolled acre. Here we consider, given heterogeneous land, what properties of the environmental benefit-to-cost ratio imply for the choice of optimal program as the available budget varies. Conditions are found such that a program of high benefits on few acres is preferred for any budget level. It is also possible that a program delivering low benefits per acre at low cost is preferred on each land type, and yet a high benefit program is optimal policy, a variant of Simpson’s paradox.

Keywords: benefit-to-cost ratio; environmental policy; land heterogeneity; Simpson’s paradox. (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-env and nep-reg
Date: 2009-10-05

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Persistent link: http://EconPapers.repec.org/RePEc:isu:genres:13115

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