Economic Evaluation of Best Management Practices for Agricultural Nutrient Runoff Abatement: A Multi-Watershed Hydro-Economic Analysis

Levan Elbakidze, Young Gwan Lee, Arun Bawa, Phil Gassman and Raghavan Srinivasan

No 404447, 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri from Agricultural and Applied Economics Association

Abstract: Agricultural nutrient runoff remains a major source of water quality impairment in the United States despite extensive conservation efforts. While previous studies have evaluated the technical effectiveness and cost-effectiveness of best management practices (BMPs), most analyses treat BMP adoption as exogenous and do not account for market-mediated adjustments in production and land use. This study develops an integrated hydro-economic framework that endogenizes BMP adoption alongside crop allocation, fertilizer use, and irrigation decisions. The model extends the Integrated Hydro-Economic Agricultural Land Use (IHEAL) framework by incorporating eight major U.S. field crops, jointly modeling nitrogen and phosphorus runoff, and integrating large-scale Soil and Water Assessment Tool (SWAT) simulations across the Mississippi–Atchafalaya River Basin, Chesapeake Bay watershed, and Maumee River watershed. The framework combines a price-endogenous partial equilibrium model with spatially explicit biophysical parameters to evaluate the economic and environmental consequences of nutrient runoff reduction policies. Preliminary results indicate that simulated commodity prices and crop production generally align with historical observations, supporting the validity of the modeling framework. The completed analysis will quantify the opportunity costs of nutrient runoff abatement, evaluate the economic efficiency of alternative BMP adoption strategies, and assess cross-watershed spillover effects arising from endogenous market adjustments.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 25
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea26:404447

DOI: 10.22004/ag.econ.404447

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