UTILITY-CONSISTENT DISCRETE-CONTINUOUS CHOICES IN SOIL CONSERVATION

A utility-consistent model of participation and participation intensit y choices for a voluntary soil conservation program is developed. A mo dified form of Roy's Identity Is used to derive a two-equation system that links the discrete, dichotomous choice (participation) and the co ntinuous choice (intensity) to the same utility function. The model co rrects for selectivity bias that arises in single-equation approaches. An application to a filter ship program in two counties in Illinois a nd Michigan demonstrates that different factors affect responses to th e program across the sample regions. Estimated willingness-to-accept p ayments for participation in the program suggest policy impacts are no t uniform across locations. (JEL Q24)