Endogenous technological change and pollution abatement

The Effect of Cost-share Programs on Ground Water Exploitation and Nonpoint-source Pollution under Endogenous Technical Change

“…We focus on development of new irrigation technologies through deliberate research by government agencies, academics, and irrigation enterprises to resolve regional problems. As a factor of production (IW in this case) becomes increasingly scarce (more costly) and government agencies subsidize the cost of adopting more-efficient irrigation technologies, irrigation enterprises allocate more R&D resources to developing technologies that save or substitute for the scarce resource (Hayami and Ruttan 1985, Kamien and Schwartz 1978, Kim et al 1996). We do not distinguish between public and private research as the efforts are often collaborative (Center for Irrigation Technology 2015, Irrigation Association 2015, Irrigation Technology Center 2015).…”

“…Therefore, we now treat the government subsidy to producers as an exogenous variable . Though comparative dynamic analyses can be used to evaluate expected changes in the shadow values, λ 1 through λ 4 (Kim et al 1996), such an analysis is needlessly complex, and we therefore use a simpler approach to evaluate the effects of a government subsidy.…”

“…Despite strong evidence that government policies and market conditions influence the direction of technological change, the development and subsequent adoption of induced irrigation technologies have not been examined as a means of protecting aquifers from over-exploitation and nonpoint-source nitrate contamination. Most of the earlier studies of irrigation technologies dealt with either adoption (Burness and Brill 2001, Ashwell and Peterson 2013, Shah, Zilberman, and Chakravorty 1995) or development (Kim et al 1996) but not both.…”