Abstract
Understanding why farmers over-apply fertilizer is essential to designing effective agroenvironmental policy. If farmers are simply inefficient, possibilities exist for simultaneously improving farm profits and the environment. If not, costly trade-offs are necessary. This article examines why farmer perceptions of agronomic advice, input substitutability, hidden opportunity costs, uncertainty, and risk aversion can make it economically rational to "waste" fertilizer by applying it above agronomically recommended rates. I use this information to evaluate the relative merits of policy responses such as insurance, education, cost-shares, regulation, taxes, and land retirement.
Original language | English (US) |
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Pages (from-to) | 542-557 |
Number of pages | 16 |
Journal | Review of Agricultural Economics |
Volume | 27 |
Issue number | 4 |
DOIs | |
State | Published - Dec 1 2005 |
Externally published | Yes |
ASJC Scopus subject areas
- Agronomy and Crop Science
- Economics and Econometrics