1. The Effects of Farm Price Supports on the Returns to Land and Labor in Agriculture
2. The Theory of Environmental Policy
3. There are two issues that must be addressed in specifying these environmental benefit and cost functions. The first has to do with non-market valuation. As the list of non-trade concerns has expanded, there has been a recognition of the difficulties posed in estimating the non-market values for jointly produced non-commodity outputs of agriculture. It has been noted by Hoehn and Randall (1989) and Carson, Flores, and Hanemann (1998) that, regardless of whether the non-market values are estimated by indirect methods, such as averting behavior and hedonic price approaches, or by direct methods, such as contingent valuation, serious problems can arise if net social benefits are estimated by summing individual values of the separate non-market goods, each derived independently using conventional valuation procedures. Carson, Flores, and Hanemann (1998) motivate their work by noting one disturbing aspect of valuation efforts: “… the observation that if one summed the public's estimated values for individual environmental amenities, the sum may exceed disposable income” (p. 314). By implicitly ignoring the effects of joint production and policy interactions, such a procedure will systematically overstate benefits or understate costs. Recently, Randall (2002) proposed a strategy for addressing these issues, but to date, no empirical work is available. Therefore, in the empirical analysis that follows, it is necessary to assume that the cross derivative between E 1 and E 2 in the social value function for the externalities [V(E 1, E 2, I), where I is real income] is small. Further, our policies are likely to have only a small effect on national income. Thus, we can approximate the value function as V ≅ B(E 1) – D(E 2).
4. Barends F. , Brouwer F. , and Schroeder F. (eds.). 1995. “Land Subsidence: By Fluid Withdrawal, by Solid Extraction, Theory and Modelling, Environmental Effects and Remedial Measures.” In Proceedings of the Fifth International Symposium on Land Subsidence. From the symposium held in The Hague, the Netherlands.