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| LaFrance, Jeffrey T.; Shimshack, Jay P.; Wu, Steven Y.. |
| A partial equilibrium model of stochastic crop production is used to analyze the environmental impacts of popular subsidized crop insurance programs. Land use is unchanged only when an actuarially fair, perfectly separating insurance contract is offered. For the more typical pooling equilibrium contracts, however, land with a minimum quality that is strictly lower than the minimum quality without insurance will be added to production. In such cases, the environment will be adversely effected. If economically marginal land is also environmentally marginal, pooling crop insurance policies disproportionately contribute to the degradation of the environment. Popular subsidies merely exacerbate the problem. |
| Tipo: Working or Discussion Paper |
Palavras-chave: Environmental Economics and Policy; Risk and Uncertainty. |
| Ano: 2001 |
URL: http://purl.umn.edu/25082 |
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| Watts, Myles J.; Shimshack, Jay P.; LaFrance, Jeffrey T.. |
| Livestock grazing on public lands continues to be a source of intense conflict and debate. We analyze this problem using a dynamic game. Low grazing fees let ranchers capture more rent from grazing. This increases the incentive to comply with federally mandated regulations. Optimal grazing contracts therefore include grazing fees that are lower than competitive private rates. The optimal policy also includes random monitoring to prevent strategic learning by cheating ranchers and avoid wasteful efforts to disguise noncompliant behavior. Finally, an optimal policy includes a penalty for cheating beyond terminating the lease. This penalty must be large enough that the rancher who would profit the most from cheating experiences a negative expected net return. |
| Tipo: Working or Discussion Paper |
Palavras-chave: Renewable resources; Public lands grazing policy; Optimal contracts; Land Economics/Use. |
| Ano: 2006 |
URL: http://purl.umn.edu/7151 |
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