Estimating Agricultural Pollution Abatement Costs at the Plot Level Using Experimental Data: A Maximum Entropy Approach
Journal of Agricultural and Resource Economics, Vol. 32, No. 2, pp. 273-290, August 2007
Posted: 19 Sep 2007
This paper uses a directional output distance function to estimate a multi-output production frontier for a sample of experimental plots grown for the Sustainable Agriculture Farming Systems project at the University of California, Davis. Cross-sectional technical efficiency indices are estimated that take into account two proxies for undesirable output: number of trips across a field as a proxy for air pollution and/or soil erosion, and pints of pesticides applied to account for potential leaching and/or health risks. Shadow price estimates based on marginal rates of transformation range from $8-$21 for trips, while shadow prices for pints of pesticides averaged $23-$37.
Keywords: Environmental efficiency index, shadow price, directional distance function
JEL Classification: Q52, Q12, C63, C13, D24
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