The economic evaluation of the social costs of agricultural groundwater pollution

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Montana State University - Bozeman, College of Agriculture


There is overwhelming evidence that agricultural chemicals make a positive contribution to U.S. agricultural production. In order to determine the net benefit (cost) to society of agricultural chemicals, the social costs and benefits must be quantified and valued. One potential social cost of agricultural chemical use is the human health effects of chemically-contaminated groundwater. In this thesis a multidisciplinary framework, incorporating physical models and economic production models, is developed to value the health risks of polluted groundwater. This framework can also be used to determine the impacts of agricultural policy on groundwater quality. In the economic model, farmers jointly make input use, management and land use decisions. Land use decisions determine the environmental characteristics of the land in production. The farmer's economic production model is linked with an environmental damage model (such as a chemical fate and transport model) to determine the amount of groundwater pollution resulting from the use of agricultural chemicals on land with particular environmental characteristics. Toxicology and epidemiology studies are used to estimate the human health risks presented by groundwater contamination, and a contingent valuation method is used to place a value on those risks. The contingent valuation method uses survey techniques to elicit individuals' willingness to pay for a change in the level of groundwater contamination and the accompanying change in health risks. A case study is presented in order to evaluate the feasibility of linking the chemical fate and transport, economic, and human health models. Although the general physical models needed for this framework are currently available, most of these models are designed to be used by researchers within the respective discipline. Consequently, there are some important gaps in methods and data, including: (1) chemical fate and transport models that do not simulate chemical movement down to the groundwater zone, (2) lack of chemical-specific toxicity and epidemiologic data, and (3) lack of location-specific environmental data. This study illustrates the need for researchers to be aware of the implications and potential applications of their research, both within and outside their fields.




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