IDEAS home Printed from https://ideas.repec.org/a/eee/agiwat/v132y2014icp79-88.html
   My bibliography  Save this article

Implications of fairness for the design of nitrate leaching policy for heterogeneous New Zealand dairy farms

Author

Listed:
  • Holland, Luke M.
  • Doole, Graeme J.

Abstract

The implementation of environmental policy may be eased when perceived outcomes are fair. The primary objective of this study is to investigate how the consideration of fairness in policy design affects the cost-effectiveness of instruments aimed at reducing nitrate leaching from heterogeneous dairy farms in New Zealand. The cost-effectiveness of each policy is compared across different levels of leaching restriction and the number of regulated farms. The cost-effectiveness of fair policy alternatives, relative to the least cost outcome, is extremely variable. Accordingly, there is no one fair policy that is the most cost-effective in any situation. Nonetheless, uniform policies that require an equivalent proportional reduction in baseline leaching load or an equivalent absolute level of mitigation are optimal, or close to it, across all simulated levels of N reduction. The implementation of such policies is promoted by their pragmatism, as baseline N loads and the associated abatement levels can be estimated through biophysical modelling. The suitability of fair policies for environmental protection is promoted by an inverse relationship between the amount of N that must be abated and the Cost of Fairness. In contrast to previous theoretical work, this empirical analysis also shows that the cost of a fair policy, relative to a differentiated policy, need not increase as the number of agents affected by a policy rises.

Suggested Citation

  • Holland, Luke M. & Doole, Graeme J., 2014. "Implications of fairness for the design of nitrate leaching policy for heterogeneous New Zealand dairy farms," Agricultural Water Management, Elsevier, vol. 132(C), pages 79-88.
    • Handle: RePEc:eee:agiwat:v:132:y:2014:i:c:p:79-88
    DOI: 10.1016/j.agwat.2013.10.008
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0378377413002783
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.agwat.2013.10.008?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. M Butler & H P Williams, 2002. "Fairness versus efficiency in charging for the use of common facilities," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 53(12), pages 1324-1329, December.
    2. Butler, Martin & Williams, H. Paul, 2002. "Fairness versus efficiency in charging for the use of common facilities," LSE Research Online Documents on Economics 18399, London School of Economics and Political Science, LSE Library.
    3. Newell, Richard G & Stavins, Robert N, 2003. "Cost Heterogeneity and the Potential Savings from Market-Based Policies," Journal of Regulatory Economics, Springer, vol. 23(1), pages 43-59, January.
    4. Doole, Graeme J., 2005. "Optimal management of the New Zealand longfin eel (Anguilla dieffenbachii)," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(4), pages 1-17.
    5. Dimitris Bertsimas & Vivek F. Farias & Nikolaos Trichakis, 2011. "The Price of Fairness," Operations Research, INFORMS, vol. 59(1), pages 17-31, February.
    6. Arthur Caplan & Emilson Silva, 2007. "An equitable, efficient and implementable scheme to control global carbon dioxide emissions," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 14(3), pages 263-279, June.
    7. Jay, Mairi, 2007. "The political economy of a productivist agriculture: New Zealand dairy discourses," Food Policy, Elsevier, vol. 32(2), pages 266-279, April.
    8. Doole, Graeme & Pannell, David J., 2012. "Empirical evaluation of nonpoint pollution policies under agent heterogeneity: regulating intensive dairy production in the Waikato region of New Zealand," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 56(01), pages 1-20, March.
    9. Doole, Graeme J., 2012. "Cost-effective policies for improving water quality by reducing nitrate emissions from diverse dairy farms: An abatement–cost perspective," Agricultural Water Management, Elsevier, vol. 104(C), pages 10-20.
    10. James S. Shortle & Richard D. Horan, 2001. "The Economics of Nonpoint Pollution Control," Journal of Economic Surveys, Wiley Blackwell, vol. 15(3), pages 255-289, July.
    11. Graeme J. Doole, 2010. "Evaluating Input Standards for Non‐Point Pollution Control under Firm Heterogeneity," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(3), pages 680-696, September.
    12. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    13. Nordblom, T.L. & Christy, B.P. & Finlayson, J.D. & Roberts, A.M. & Kelly, J.A., 2010. "Least cost land-use changes for targeted catchment salt load and water yield impacts in south eastern Australia," Agricultural Water Management, Elsevier, vol. 97(6), pages 811-823, June.
    14. Pascual, Unai & Muradian, Roldan & Rodríguez, Luis C. & Duraiappah, Anantha, 2010. "Exploring the links between equity and efficiency in payments for environmental services: A conceptual approach," Ecological Economics, Elsevier, vol. 69(6), pages 1237-1244, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bermeo, Santiago & Doole, Graeme & Austin, Darran & Fenemor, Andrew, 2016. "Waimea Plains: economics of freshwater quantity management," 2016 Conference (60th), February 2-5, 2016, Canberra, Australia 235246, Australian Agricultural and Resource Economics Society.
    2. Bermeo, Santiago & Austin, Darran & Doole, Graeme & Fenemor, Andrew, 2016. "Waimea Plains: Economics of freshwater quantity management," 2016 Conference (60th), February 2-5, 2016, Canberra, Australia 235247, Australian Agricultural and Resource Economics Society.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dimitris Bertsimas & Vivek F. Farias & Nikolaos Trichakis, 2012. "On the Efficiency-Fairness Trade-off," Management Science, INFORMS, vol. 58(12), pages 2234-2250, December.
    2. Doole, Graeme J., 2012. "Cost-effective policies for improving water quality by reducing nitrate emissions from diverse dairy farms: An abatement–cost perspective," Agricultural Water Management, Elsevier, vol. 104(C), pages 10-20.
    3. Nicosia, Gaia & Pacifici, Andrea & Pferschy, Ulrich, 2017. "Price of Fairness for allocating a bounded resource," European Journal of Operational Research, Elsevier, vol. 257(3), pages 933-943.
    4. Dimitris Bertsimas & Vivek F. Farias & Nikolaos Trichakis, 2011. "The Price of Fairness," Operations Research, INFORMS, vol. 59(1), pages 17-31, February.
    5. Agnetis, Alessandro & Chen, Bo & Nicosia, Gaia & Pacifici, Andrea, 2019. "Price of fairness in two-agent single-machine scheduling problems," European Journal of Operational Research, Elsevier, vol. 276(1), pages 79-87.
    6. Encarna Esteban & José Albiac, 2016. "Salinity Pollution Control in the Presence of Farm Heterogeneity — An Empirical Analysis," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(02), pages 1-20, June.
    7. LAMAS, ALEJANDRO & CHEVALIER, Philippe, 2013. "Jumping the hurdles for collaboration: fairness in operations pooling in the absence of transfer payments," LIDAM Discussion Papers CORE 2013073, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    8. Simon Quemin & Christian Perthuis, 2019. "Transitional Restricted Linkage Between Emissions Trading Schemes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(1), pages 1-32, September.
    9. White, Leroy & Bourne, Humphrey, 2007. "Voices and values: Linking values with participation in OR/MS in public policy making," Omega, Elsevier, vol. 35(5), pages 588-603, October.
    10. Alexander Lam & Haris Aziz & Bo Li & Fahimeh Ramezani & Toby Walsh, 2023. "Proportional Fairness in Obnoxious Facility Location," Papers 2301.04340, arXiv.org, revised Nov 2024.
    11. Shiran Rachmilevitch, 2016. "Egalitarian–utilitarian bounds in Nash’s bargaining problem," Theory and Decision, Springer, vol. 80(3), pages 427-442, March.
    12. Breugem, Thomas & Van Wassenhove, Luk N., 2022. "The price of imposing vertical equity through asymmetric outcome constraints," Other publications TiSEM b6e85652-c54a-4597-a32e-d, Tilburg University, School of Economics and Management.
    13. Feimin Zhong & Jinxing Xie & Xiaobo Zhao, 2014. "The price of fairness with the extended Perles–Maschler solution," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 80(2), pages 193-212, October.
    14. Klosterhalfen, Steffen T. & Kallrath, Josef & Frey, Markus M. & Schreieck, Anna & Blackburn, Robert & Buchmann, Jan & Weidner, Felix, 2019. "Creating cost transparency to support strategic planning in complex chemical value chains," European Journal of Operational Research, Elsevier, vol. 279(2), pages 605-619.
    15. Janne Kettunen & Eissa Nematollahi & Yuriy Zinchenko, 2022. "Why do Energy Markets in Europe Rely on One Instrument?," Production and Operations Management, Production and Operations Management Society, vol. 31(4), pages 1473-1491, April.
    16. López-Flores, Francisco Javier & Hernández-Pérez, Luis Germán & Lira-Barragán, Luis Fernando & Rubio-Castro, Eusiel & Ponce-Ortega, José M., 2022. "Optimal Profit Distribution in Interplant Waste Heat Integration through a Hybrid Approach," Energy, Elsevier, vol. 253(C).
    17. Tehrani Nejad Moghaddam, Alireza & Michelot, Christian, 2009. "A contribution to the linear programming approach to joint cost allocation: Methodology and application," European Journal of Operational Research, Elsevier, vol. 197(3), pages 999-1011, September.
    18. Özlem Karsu & Hale Erkan, 2020. "Balance in resource allocation problems: a changing reference approach," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 42(1), pages 297-326, March.
    19. Liu, Songsong & Papageorgiou, Lazaros G., 2018. "Fair profit distribution in multi-echelon supply chains via transfer prices," Omega, Elsevier, vol. 80(C), pages 77-94.
    20. Guillaume Roels & Christopher S. Tang, 2017. "Win-Win Capacity Allocation Contracts in Coproduction and Codistribution Alliances," Management Science, INFORMS, vol. 63(3), pages 861-881, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:agiwat:v:132:y:2014:i:c:p:79-88. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/agwat .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.