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Optimal Agricultural Land Pricing Policies Under Multiple Externalities In A Global Economy

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  • Peterson, Jeffrey M.

Abstract

Agriculture has recently been noted as a provider of non-market environmental benefits in addition to its traditional recognition as a source of negative externalities from polluting inputs. In this paper, a general equilibrium framework is used to determine optimal land subsidies and input taxes in agriculture. When agriculture generates both amenities and pollution, the optimal subsidy does not equal the net extra-market value of agricultural land. If opened to international trade, a small economy will fully correct externalities, while large economies have an incentive to set policies at non-internalizing levels to exploit terms-of-trade effects.

Suggested Citation

  • Peterson, Jeffrey M., 1999. "Optimal Agricultural Land Pricing Policies Under Multiple Externalities In A Global Economy," 1999 Annual meeting, August 8-11, Nashville, TN 21613, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea99:21613
    DOI: 10.22004/ag.econ.21613
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    References listed on IDEAS

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    1. Rigoberto A. Lopez & Farhed A. Shah & Marilyn A. Altobello, 1994. "Amenity Benefits and the Optimal Allocation of Land," Land Economics, University of Wisconsin Press, vol. 70(1), pages 53-62.
    2. Bergstrom, John C., 1998. "Exploring And Expanding The Landscape Values Terrain," Faculty Series 16653, University of Georgia, Department of Agricultural and Applied Economics.
    3. Copeland Brian R., 1994. "International Trade and the Environment: Policy Reform in a Polluted Small Open Economy," Journal of Environmental Economics and Management, Elsevier, vol. 26(1), pages 44-65, January.
    4. Pierre Crosson, 1985. "Agricultural land: A question of values," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 2(4), pages 6-13, September.
    5. Krutilla, Kerry, 1991. "Environmental regulation in an open economy," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 127-142, March.
    6. Franz Hackl & Gerald Pruckner, 1997. "Towards More Efficient Compensation Programmes for Tourists' Benefits From Agriculture in Europe," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 10(2), pages 189-205, September.
    7. Lopez, Rigoberto A. & Altobello, Marilyn A. & Shah, Farhed A., 1994. "Amenity Benefits And Public Policy: An Application To The Connecticut Dairy Sector," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 26(2), pages 1-12, December.
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    Cited by:

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    2. Ren, Xiaolin & Fullerton, Don & Braden, John B., 2011. "Optimal taxation of externalities interacting through markets: A theoretical general equilibrium analysis," Resource and Energy Economics, Elsevier, vol. 33(3), pages 496-514, September.

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