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Multiple Agents, and Agricultural Nonpoint-Source Water Pollution Control Policies

Published online by Cambridge University Press:  15 September 2016

Rodney B.W. Smith  and
Theodore D. Tomasi
Rodney B.W. Smith
Affiliation:
Department of Agricultural and Applied Economics, University of Minnesota
Theodore D. Tomasi
Affiliation:
ECG Consultants, Wilmington Delaware
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Abstract

Assuming asymmetric information over farmer profits and zero transaction costs, prior literature has suggested that when regulating nonpoint source water pollution, a tax on management practices (inputs) can implement full-information allocations and is superior to a tax on estimated runoff. Using mechanism design theory under asymmetric information, this paper shows that under the same assumptions, management practice taxes and taxes on estimated runoff are equally efficient.

Type
Articles
Information
Agricultural and Resource Economics Review , Volume 28 , Issue 1 , April 1999 , pp. 37 - 43
Copyright
Copyright © 1999 Northeastern Agricultural and Resource Economics Association 

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