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Demand impact and policy implications from taxing nitrogen fertilizer

Conference · · American Journal of Agricultural Economics; (United States)
OSTI ID:6637621

Recent concern has focused on nitrogen fertilizer as a potential contaminant of groundwater. A demand function for fertilizer was developed using the quantity of fertilizer purchased, corn yield, real price of nitrogen fertilizer, lagged fertilizer purchases, a land value variable and the real price of corn as explanatory variables. Short and long-run price elasticities of demand were estimated to be inelastic. Support was found for the hypothesis that demand for nitrogen fertilizer has become more price inelastic over time. From a policy standpoint, a tax on nitrogen fertilizer may not be the most effective method to reduce consumption.

OSTI ID:
6637621
Report Number(s):
CONF-9208213--
Journal Information:
American Journal of Agricultural Economics; (United States), Journal Name: American Journal of Agricultural Economics; (United States) Vol. 74:5; ISSN 0002-9092; ISSN AJAEBA
Country of Publication:
United States
Language:
English