Nonpoint Source Pollution Control Under Incomplete and Costly Information
Y. Hossein Farzin
University of California, Davis - Department of Agricultural and Resource Economics; Oxford Centre for the Analysis of Resource Rich Economies (OxCarre)
University of California, Davis - Department of Agricultural and Resource Economics
This paper analyzes the efficient management of nonpoint source pollution (NPS) under limited pollution control budget and incomplete information inherent in NPS pollution. By incorporating information acquisition into a pollution control model, it focuses on the tradeoff between data collection and treatment efforts and derives conditions under which (i) a favorable change in the state of treatment cost at one site may lead to an increase in treatment level at another site, (ii) a higher data collection cost induces more data collection, and (iii) an increase in information productivity leads to an increase in the level of data collection. A numerical simulation of the model illustrates how in managing NPS pollution the value of information acquisition depends on the degree of heterogeneity of polluting sites.
Number of Pages in PDF File: 35
JEL Classification: D61, D81, D83, Q28working papers series
Date posted: March 11, 1999
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