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Reverse Auctions for Agri-Environmental Improvements: Bid-Selection Rules and Pricing for Beneficial Management Practice Adoption

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  • Peter C. Boxall
  • Orsolya Perger
  • Marian Weber

Abstract

This study uses experimental economic methods to examine the efficacy of reverse auctions to generate efficient nutrient abatement from livestock operations. The experimental parameters were benchmarked to a specific beneficial management practice in a Manitoba watershed and were used to examine three bid-selection rules and two pricing rules. The results suggest that targeting livestock with the practice performed almost as well as targeting specific abatement levels at the farm level. Auctions that maximized participation of producers fared poorly on both environmental and economic outcome measures. The uniform-price rule was found to be superior to the discriminative-pricing rule.

Suggested Citation

  • Peter C. Boxall & Orsolya Perger & Marian Weber, 2013. "Reverse Auctions for Agri-Environmental Improvements: Bid-Selection Rules and Pricing for Beneficial Management Practice Adoption," Canadian Public Policy, University of Toronto Press, vol. 39(s2), pages 23-36, August.
    • Handle: RePEc:cpp:issued:v:39:y:2013:i:s2:p:23-36
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    References listed on IDEAS

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    7. Michael R. J. Hill & D. Glen McMaster & Tom Harrison & Aron Hershmiller & Trevor Plews, 2011. "A Reverse Auction for Wetland Restoration in the Assiniboine River Watershed, Saskatchewan," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 59, pages 245-258, June.
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    10. Boxall, Peter C. & Weber, Marian & Perger, Orsolya & Cutlac, Marius & Samarawickrema, Antony, 2008. "Results from the Farm Behaviour Component of the Integrated Economic-Hydrologic Model for the Watershed Evaluation of Beneficial Management Practices Program," Project Report Series 116268, University of Alberta, Department of Resource Economics and Environmental Sociology.
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    Cited by:

    1. Pattison-Williams, John K. & Yang, Wanhong & Liu, Yongbo & Gabor, Shane, 2017. "Riparian wetland conservation: A case study of phosphorous and social return on investment in the Black River watershed," Ecosystem Services, Elsevier, vol. 26(PB), pages 400-410.
    2. Pattison-Williams, John K. & Pomeroy, John W. & Badiou, Pascal & Gabor, Shane, 2018. "Wetlands, Flood Control and Ecosystem Services in the Smith Creek Drainage Basin: A Case Study in Saskatchewan, Canada," Ecological Economics, Elsevier, vol. 147(C), pages 36-47.
    3. Bruno Wichmann & Peter Boxall & Scott Wilson & Orsolya Pergery, 2017. "Auctioning Risky Conservation Contracts," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(4), pages 1111-1144, December.
    4. Uchida, Emi & Swallow, Stephen K. & Gold, Arthur J. & Opaluch, James & Kafle, Achyut & Merrill, Nathaniel H. & Michaud, Clayton & Gill, Carrie Anne, 2018. "Integrating Watershed Hydrology and Economics to Establish a Local Market for Water Quality Improvement: A Field Experiment," Ecological Economics, Elsevier, vol. 146(C), pages 17-25.
    5. Harris, Leah M. & Swinton, Scott M. & Shupp, Robert S., 2014. "Experimental auctions to evaluate incentives for cost-effective agricultural phosphorus abatement in the Great Lakes," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170287, Agricultural and Applied Economics Association.

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