Non-separability and heterogeneity in integrated agronomic-economic analysis of nonpoint-source pollution

This paper highlights two aspects that are crucial in the management of agr icultural nonpoint-source pollution, but that are typically not taken into account in applied economic studies. Firstly. production, pollution and aba tement are to be treated as non-separable to include control options provid ed by changes in production practices. Besides. non-separability enables pr oper account to be taken of the material flow through production processes and changes the perspective on optimal environmental regulations. Secondly, the resolution or level of spatio-temporal aggregation should capture the heterogeneity in the economic and ecological attributes (production conditi on. fixed but allocatable inputs and technology set) of the individual deci sion-maker's policies they intend to influence. The implications of non-sep arability and heterogeneity for empirical studies and for policy are illust rated by two simulation studies oil nitrogen and pesticide use in crop farm ing. (C) 2001 Elsevier Science B.V. All rights reserved.