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Using Field-level Characteristics as Proxy Measures to Test for the Presence of Economies of Scale in Nonpoint Pollution Control

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  • Caplan, Arthur J.
  • Gilbert, John
  • Chatterjee, Devalina

Abstract

We use parametric and nonparametric methods to estimate correlations between average control cost and three field-level characteristics—field size and delivered phosphorous per field and per acre—as proxies for economies of scale in controlling nonpoint pollution. We combine load and delivery-ratio estimates for more than 12,000 fields in the Bear River Basin, Utah, with estimates of control costs and effectiveness of management practices from the literature. Results suggest a negative relationship between control cost and delivered phosphorous per field and per acre. Ranking fields by phosphorous load therefore prioritizes management-practice subsidies by economies of scale.

Suggested Citation

  • Caplan, Arthur J. & Gilbert, John & Chatterjee, Devalina, 2013. "Using Field-level Characteristics as Proxy Measures to Test for the Presence of Economies of Scale in Nonpoint Pollution Control," Agricultural and Resource Economics Review, Cambridge University Press, vol. 42(2), pages 365-386, August.
    • Handle: RePEc:cup:agrerw:v:42:y:2013:i:02:p:365-386_00
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