The Role of Cost-Share Rates and Prices on the Size of Conservation Investments in EQIP

Michael S. Hand and Cynthia J. Nickerson

No 49257, 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin from Agricultural and Applied Economics Association

Abstract: Per-unit costs for conservation investments in the Environmental Quality Incentives Program (EQIP) are determined by market prices for conservation practices and payment cost-share rates. This study examines the relative importance of these factors in determining the size of the most common conservation investment in EQIP. Results suggest that per unit costs have a significant but inelastic impact on the size of conservation investment; as expected, higher per-unit costs are associated with smaller investments. This effect is largely due to variation in market prices of conservation practices for the majority of farmers. However, cost-share rates may play a role for some limited resource farmers.

Keywords: Agricultural and Food Policy; Environmental Economics and Policy (search for similar items in EconPapers)
Pages: 24
Date: 2009-04
New Economics Papers: this item is included in nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea09:49257

DOI: 10.22004/ag.econ.49257

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