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Transaction Costs of Environmental Policies and Returns to Scale: The Case of Comprehensive Nutrient Management Plans

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  • Laura M.J. McCann

Abstract

Comprehensive nutrient management plans are being promoted to reduce excess nutrient applications on livestock farms to improve water quality. Development of these plans has been shown to exhibit increasing returns to scale but these costs did not include farmer time. Data from a farmer survey are used to characterize the magnitude and determinants of the transaction costs of comprehensive nutrient management plan development in the Midwest. The analyses confirm that the time spent by farmers exhibits increasing returns to scale. Ignoring the hours spent by farmers on plan development underestimates time requirements by approximately 10%.

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  • Laura M.J. McCann, 2009. "Transaction Costs of Environmental Policies and Returns to Scale: The Case of Comprehensive Nutrient Management Plans," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 31(3), pages 561-573.
    • Handle: RePEc:oup:revage:v:31:y:2009:i:3:p:561-573.
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    File URL: http://hdl.handle.net/10.1111/j.1467-9353.2009.01453.x
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    References listed on IDEAS

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    1. McCann, Laura & Colby, Bonnie & Easter, K. William & Kasterine, Alexander & Kuperan, K.V., 2005. "Transaction cost measurement for evaluating environmental policies," Ecological Economics, Elsevier, vol. 52(4), pages 527-542, March.
    2. Pease, James W. & Schweikhardt, David B. & Seidl, Andrew F., 2008. "Conservation Provisions of the Food, Conservation and Energy Act of 2008: Evolutionary Changes and Challenges," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 23(3), pages 1-5.
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    5. McCann, Laura M.J. & Nunez, Jennifer, 2005. "Who Participates in EQIP?," 2005 Annual meeting, July 24-27, Providence, RI 19446, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Daniel F. Spulber, 1989. "Regulation and Markets," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262192756, April.
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    Cited by:

    1. Andarge, Tihitina & Lichtenberg, Erik, 2018. "Regulated Firm Strategy under Uncertainty about Regulatory Status," 2018 Annual Meeting, August 5-7, Washington, D.C. 274420, Agricultural and Applied Economics Association.
    2. McCann, Laura, 2013. "Transaction costs and environmental policy design," Ecological Economics, Elsevier, vol. 88(C), pages 253-262.
    3. Stacy Sneeringer & Nigel Key & Shirley Pon, 2018. "Do Nutrient Management Plans Actually Manage Nutrients? Evidence from a Nationally‐Representative Survey of Hog Producers," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 40(4), pages 632-652, December.
    4. Sneeringer, Stacy & Pon, Shirley, 2016. "Do nutrient management plans actually manage nutrients? Evidence from a nationally-representative survey of hog producers," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235681, Agricultural and Applied Economics Association.
    5. Wen, Lanjiao & Chatalova, Lioudmila, 2021. "Will transaction costs and economies of scale tip the balance in farm size in industrial agriculture? An illustration for non-food biomass production in Germany," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 13(2).
    6. Claassen, Roger & Duquette, Eric & Horowitz, John & Kohei, Ueda, 2014. "Additionality in U.S. Agricultural Conservation and Regulatory Offset Programs," Economic Research Report 180414, United States Department of Agriculture, Economic Research Service.
    7. Lanjiao Wen & Lioudmila Chatalova, 2021. "Will Transaction Costs and Economies of Scale Tip the Balance in Farm Size in Industrial Agriculture? An Illustration for Non-Food Biomass Production in Germany," Sustainability, MDPI, vol. 13(2), pages 1-18, January.
    8. Tihitina Andarge & Erik Lichtenberg, 2020. "Regulatory compliance under enforcement gaps," Journal of Regulatory Economics, Springer, vol. 57(3), pages 181-202, June.

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