A Spatial Price Equilibrium Analysis of Market-Based Incentives to Abate Nonpoint Source Agricultural Nutrient Pollution

Marc E. Norman
John D. Keenan
Patrick T. Harker

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DOI: 10.2190/MVCG-CQTK-Q175-GA0T

Abstract

Nutrients such as nitrogen and phosphorus are essential for agricultural crop growth. In excess amounts, however, they can cause water pollution problems such as eutrophication. One of the principal means to reduce non-point nutrient pollution is through the application of market incentives. In this article, computable spatial price equilibrium models are developed to analyze the effects of various market incentive schemes to reduce agricultural nutrient pollution. the models are applied empirically to an agricultural subsector of southeastern Pennsylvania. Based on the results of the analysis, and on issues regarding implementation, policy recommendations are developed.

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