Integrated analysis of policy options for protection of groundwater quality

This paper is directed at providing an integrated framework that a regional authority should use when assessing the potential impacts of any policy initiative directed at improving groundwater quality. In particular, a policy model is developed relying on three decision components (a farm-level production decisions model, a household decisions model and a regional policy decision model) where the objective is one of identifying the trade-offs that a regional authority will be confronted with as it strives to balance the preferences of farmers and households while endeavoring to maximize net economic welfare. The basic rule developed indicates that the regional authority must choose a policy whereby any increase (decrease) in regional income is just equal to the decrease (increase) in net benefits to households.The views expressed are those of the authors and do not necessarily represent the policies of the U.S. Department of Agriculture or the views of other U.S. Department of Agriculture staff members.