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The Economics of a Public Fund for Environmental Amenities: A Study of CRP Contracts
Author(s) -
Babcock Bruce A.,
Lakshminarayan P.G.,
Wu JunJie,
Zilberman David
Publication year - 1996
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1243852
Subject(s) - purchasing , productivity , natural resource economics , economics , environmental economics , cost–benefit analysis , business , environmental science , ecology , operations management , macroeconomics , biology
Abstract The problem of targeting CRP purchases to buy environmental amenities under productivity and environmental heterogeneity is considered. Gini coefficients and Lorenz curves are used to measure the effectiveness of spending under alternative targeting criteria. The environmental benefits considered are water erosion, wind erosion, surface water quality, and wildlife habitat. The three alternative targeting criteria examined include purchasing land according to ( i ) the benefit‐to‐cost ratio, ( ii ) the level of benefits, and ( iii ) the level of cost. Results indicate that the degree of variability and correlation determine the extent to which suboptimal targeting achieves a significant portion of available environmental benefits.

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