Agroecosystem Modeling and Optimal Economic Decisions: Implications for Sustainable Agriculture

Optimal Control Applications and Methods, Forthcoming

41 Pages Posted: 20 Sep 2007

See all articles by Craig A. Bond

Craig A. Bond

Colorado State University, Fort Collins - Department of Agriculture and Resource Economics

Y. Hossein Farzin

University of California, Davis - Department of Agricultural and Resource Economics; Oxford Centre for the Analysis of Resource Rich Economies (OxCarre)

Abstract

We adapt a biogeochemical model of an agroecosystem to account for optimal economic behavior on the part of agricultural producers. Two institutional management regimes are considered: one in which a representative producer does not account for stock pollution caused by use of agricultural inputs, and one in which the externality is internalized. Comparative statics of the steady state of the former problem are analyzed in order to gain insight into effects of potential policy and technological changes. Results show that a more realistic ecosystem component that includes nutrient cycling can qualitatively change optimal management practices relative to a one-state representation, potentially rendering systems "unsustainable" under some criteria and leading to policy instruments that exacerbate, rather than mitigate, external damages or the resource base. Moreover, the qualitative effect of changes in model parameters are not necessarily uniform across different agricultural systems, implying that a prescription for so-called "sustainable" management under one system may have unintended consequences for another system.

Keywords: Agroecosystem, dynamic model, optimal control, stock externality, comparative statics, technological change

JEL Classification: C61, Q16, Q24, Q53

Suggested Citation

Bond, Craig A. and Farzin, Y. Hossein, Agroecosystem Modeling and Optimal Economic Decisions: Implications for Sustainable Agriculture. Optimal Control Applications and Methods, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1015415

Craig A. Bond (Contact Author)

Colorado State University, Fort Collins - Department of Agriculture and Resource Economics ( email )

Fort Collins, CO 80523
United States

Y. Hossein Farzin

University of California, Davis - Department of Agricultural and Resource Economics ( email )

One Shields Avenue
Davis, CA 95616
United States
530-752-7610 (Phone)
530-752-5614 (Fax)

HOME PAGE: http://farzin.ucdavis.edu/

Oxford Centre for the Analysis of Resource Rich Economies (OxCarre) ( email )

University of Oxford, Department of Economics
Manor Road
Oxford, OX1 4AU
United Kingdom

HOME PAGE: http://www.oxcarre.ox.ac.uk

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
124
Abstract Views
1,505
Rank
421,419
PlumX Metrics