The Impact of Policies and Land Characteristics on Potential Groundwater Pollution in Wisconsin

In this paper we present an empirical framework for quantifying the extensive margin effects of commodity programs and chemical-use taxes on potential groundwater pollution in Wisconsin. The approach emphasizes the role of the joint distribution of crops and site characteristics in determining policy impacts on groundwater contamination. The results indicate that for a given reduction in total polluting acreage an increase in the Acreage Reduction Program rate for corn is well targeted and would reduce high-polluting acreage more than a chemical-use tax or a target price policy in the areas where it might be needed most.