State Level Efforts to Regulate Agricultural Sources of Water Quality Impairment

The U.S. policy regarding water quality is codified in the 1972 Clean Water Act and amendments. The Act formally distinguishes between point sources and nonpoint sources of pollution entering waterways and assigns primary responsibility for controlling nonpoint source pollution to the states. Point sources—such as industrial facilities or wastewater treatment plants—fall under the National Pollutant Discharge Elimination System requirements of the Clean Water Act, and being so are subject to federal regulation and permitting requirements. A substantial reduction of emissions from point sources to waterways has occurred since the adoption of these requirements, leading to much improved water quality in many watersheds. However, in many agriculturally dominated watersheds, point sources contribute a relatively small percent of the overall nutrient load and, therefore, the restrictions on these sources have not achieved the desired improvements in water quality. The nutrients of primary concern in these watersheds are nitrogen and phosphorus, which cause excessive plant and algae growth resulting in water quality degradatio

Can Voluntary Adoption of Agricultural Practices Achieve the Hypoxic Zone Reduction Goals?

The presence of a “dead zone” in the Gulf of Mexico caused by nutrients (nitrogen and phosphorus) coming from upstream watersheds continues to recur annually. As part of the 2008 action plan promulgated by the Hypoxia Task Force to address the problem, each state with major nutrient contributions to the Gulf was tasked with developing and implementing a nutrient reduction strategy. Most of the 12 states included have begun or completed their plans. A common theme among all states is the focus on voluntary adoption of the practices identified rather than a regulatory strategy

Greetings from CARD!

CARD researchers and afϐiliates have a long tradition of developing and applying the tools of economics to create knowledge that supports good agricultural policy, and to help us continue in that tradition we have created the Agricultural Policy Review. I am delighted that economics faculty with extension appointments will join CARD faculty and staff in producing a timely, relevant publication that I am conϐident readers interested in many facets of agricultural policy including energy, nutrition, food security, international trade, and the environment will ϐind highly valuabl

Heartland Environmental and Resource Economics Workshop

The first Heartland Environmental and Resource Economics (HERE) workshop took place September 19-21, 1999, in Ames, Iowa. The purpose was to bring economists working on environmental and resource problems in the Midwest together in an informal setting. The pleasant setting provided an ideal environment for researchers, students, and other professional environmental economists to exchange research ideas, critically assess each other’s work, and to encourage collaborative efforts

The Iowa Nutrient Reduction Strategy to Address Gulf of Mexico Hypoxia

Since 1985, the size of the hypoxic zone in the Gulf of Mexico has been measured every July via a cruise on the Pelican, a ship operated by the Louisiana University Marine Consortium under the direction of Dr. Nancy Rabalais. The hypoxic zone, colloquially referred to as the “dead zone,” is an area where nutrient-enriched waters coming from freshwater rivers and streams in the watershed cause excess growth of plants which, in turn, deplete oxygen levels as they decompose. The extent of oxygen depletion is nearly complete in that it creates unsuitable habitat for animals living in the region. The result of this year’s annual cruise indicated an area of low oxygen level of about 5,800 square miles, an area roughly three times as large as the targeted goal. A significant source of the nutrients that flow into the Gulf originate from agricultural sources, specifically row crop land in the corn belt

THE IMPORTANCE OF FUNCTIONAL FORM IN THE ESTIMATION OF WELFARE

Researchers have recognized the central role that the choice of functional form has on estimated of consumer surplus. The purpose of this paper is to quantify the magnitude of errors which might arise from the use of incorrect functional forms. It describes a simulation experiment where estimated consumer surplus, based on simulated data sets, is compared with consumer surplus computed directly from the simulate data. The errors resulting from the use of mismatching functional forms range from approximately 4% to 107%.Institutional and Behavioral Economics, Research Methods/ Statistical Methods,

A Simulation Approach to Comparing Multiple Site Recreation Demand Models Using Chesapeake Bay Survey Data

To value water quality improvements in the Chesapeake Bay or elsewhere, it is necessary to choose an appropriate model of consumer behavior. A number of different travel cost based recreation demand models have been employed to value changes in water quality or beach access. Among the possible models to choose from are the typical trip model, the pooled observations approach, a varying parameter model, and a logit model. Each approach makes different assumptions about the structure of individual preferences and the choice process underlying individual decisions. The purpose of this paper is to implement a methodology that can be used to suggest a model (or models) appropriate for valuing quality improvements in the Chesapeake Bay. To compare these approaches, a series of outdoor recreation user populations is constructed by choosing a utility function, its parameter values and an error distribution. This information is combined with the characteristics of individuals and recreation sites from a Chesapeake Bay recreation demand survey to solve the individual's maximization problem. Each of the models is estimated using these data, and the compensating variation of a quality change is calculated. Benefit estimates are compared with simulated welfare change to evaluate the models.Community/Rural/Urban Development, Demand and Price Analysis, Environmental Economics and Policy, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy,

Nonlinear Income Effects in Random Utility Models

Random utility models (RUMs) are used in the literature to model consumer choices from among a discrete set of alternatives, and they typically impose a constant marginal utility of income on individual preferences. This assumption is driven partially by the difficulty of constructing welfare estimates in models with nonlinear income effects. Recently, McFadden (1995) developed an algorithm for computing these welfare impacts using a Monte Carlo Markov chain simulator for generalized extreme-value variates. This paper investigates the empirical consequences of nonlinear RUMs in the case of sportfishing modal choice, while refining and contrasting the available methods for welfare estimation

Iowa’s Wetlands: Who Will Pay for Preservation?

It is estimated that before the 1750s, Iowa had around 2.3 million acres of wetlands. Today, Iowa has about 35,000 acres, with over 98 percent of the original wetlands converted to other uses—primarily agricultural production