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Estimates of Public Sector Transaction Costs in NRCS Programs

Published online by Cambridge University Press:  28 April 2015

Laura McCann  and
K. William Easter
Laura McCann
Affiliation:
University of Western Australia
K. William Easter
Affiliation:
University of Minnesota
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Abstract

When evaluating the economic efficiency of policies to reduce nonpoint source pollution, administrative or transaction costs are usually not taken into account. While the importance of transaction costs has been recognized in the theoretical literature, the fact that they are not incorporated in empirical analyses means that, in effect, these costs are given a zero value. This issue is examined quantitatively using data collected by the National Resource Conservation Service (NRCS). Transaction costs are found to be a significant portion (38 percent) of overall conservation costs. This provides strong support for including these costs in economic evaluations of alternative policy instruments.

Keywords

NRCStransaction costsnonpoint pollutionconservation practicesabatement costsenvironmental policy
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 32 , Issue 3 , December 2000 , pp. 555 - 563
Copyright
Copyright © Southern Agricultural Economics Association 2000

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