Contracts for Land Retirement under Asymmetric Information

Jananee Raguragavan, Ben White and Robert C. Chambers

No 174722, 2006 Conference (50th), February 8-10, 2006, Sydney, Australia from Australian Agricultural and Resource Economics Society

Abstract: A land retirement policy whereby land is taken out of agriculture and converted to natural vegetation or forestry has the potential to reduce environmental damage related to dryland salinity in Western Australia. This paper uses some recent results in the theory of directional distance functions (Chambers and Fare, 2004) to analyse alternative policy designs for a land retirement scheme. The results indicate that a fixed price scheme is inefficient compared with a first-best solution, but performs adequately. A scheme requiring a fixed proportion of area retired by all producers is inefficient. A separating solution, based on mechanism design, gives a small but siginificant increase in welfare compared to a fixed price scheme.

Keywords: Land Economics/Use; Research and Development/Tech Change/Emerging Technologies (search for similar items in EconPapers)
Pages: 19
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/174722/files/2006_raguragavan.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:aare06:174722

DOI: 10.22004/ag.econ.174722

Access Statistics for this paper

More papers in 2006 Conference (50th), February 8-10, 2006, Sydney, Australia from Australian Agricultural and Resource Economics Society Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search (aesearch@umn.edu).