A Bayesian Approach to Analyzing the Economic Costs of Environmental Regulation in U.S. Dairy Farming

Eric Njuki and Boris Bravo-Ureta

No 33, Working Papers from University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy

Abstract: This paper develops a comprehensive pollution index based on EPA (2009) methodologies, which contrasts with previous studies that rely on partial measures based only on surplus nitrogen stemming from the over-application of fertilizer. Second, it uses a directional output distance function on a Bayesian framework, to generate empirical estimates of the economic impact associated with hypothetical environmental regulations in the dairy sector. Results indicate that on average, values of foregone output following regulatory intervention lead to revenue losses ranging from 1.8% to 13.1% across different regions between 1978 and 2007.

Keywords: Environmental regulation; undesirable outputs; directional output distance function; Morishima elasticity of substitution; Bayesian framework; shadow prices; dairy farming (search for similar items in EconPapers)
JEL-codes: D22 Q15 Q52 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2014-05
New Economics Papers: this item is included in nep-eff and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: A Bayesian Approach to Analyzing the Economic Costs of Environmental Regulation in U.S. Dairy Farming (2014)
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