Ge. Helfand et Bw. House, REGULATING NONPOINT-SOURCE POLLUTION UNDER HETEROGENEOUS CONDITIONS, American journal of agricultural economics, 77(4), 1995, pp. 1024-1032
Because of difficulties in measuring effluent from nonpoint pollution,
proposals for regulating agricultural runoff often suggest instrument
s applied to inputs or management practices. When pollution functions
vary across sources, uniform input instruments cannot achieve a least-
cost pollution reduction, but efficient instruments may be difficult t
o administer. In this paper we analyze lettuce production on two soils
in California's Salinas Valley to consider empirical costs associated
with uniform input taxes and regulations. The results suggest that un
iform instruments may not be costly relative to an efficient baseline.
Though taxes are more efficient, farmers have higher profits with reg
ulations.