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Costs of a Practice-based Air Quality Regulation: Dairy Farms in the San Joaquin Valley

Wei Zhang ()

American Journal of Agricultural Economics, 2018, vol. 100, issue 3, 762-785

Abstract: Facing the difficulty of accurately measuring pollution from agriculture, economists have recommended regulatory approaches using proxies such as management practices to reduce agricultural pollution. Using farm-level cost data on a panel of dairy farms, I estimate the effects of a practice-based air quality regulation for dairy farms in the San Joaquin Valley in California. As opposed to ex ante analyses, my econometric results indicate that the air quality regulation has not significantly affected the total costs of milk production. Estimates also suggest that the regulation might have differential effects on different elements of costs. I support the econometric findings with evidence on how dairy farms comply with the regulation. Calculated adoption rates of different pollution-mitigation practices using administrative data reveal that dairy farms have mainly adopted labor-intensive practices to comply with the regulation.

Keywords: Dairy; environmental regulation; farm practice; production cost (search for similar items in EconPapers)
Date: 2018
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