Structural Conservation Practices in U.S. Corn Production: Evidence on Environmental Stewardship by Program Participants and Non-Participants

(3)    Aj,p(yj,p) = exp Wp-xpyi,p) / ^ci,p(yi,p)] ^- [Pkxk(yj,p) / cj,p(yj,p^)]} = exp[^dln Aj,p(yj,p) / ^dlnPk^]

for k = 1, 2, . . , n, where ∑ [∂ln (Aj,p) / ∂ln pk] ≠ 0 implies that the j^th conservation or production
κ

technology in the p^th participation class is non-homothetic (Antle, 1984).

An estimable econometric acreage supply function for the j^th conservation or production
technology within the p^th class is derived from equation (3) as:

(4)   Aj,p(yj,p) = exp{αo,p + ∑ ∑αj,p,k (pk /Py) + εp},

kj

where αj,p,k (k = 1, 2, . . . , n) is the k^th input parameter for the j^th technology, Py is output price, εp is
an error term for the p^th participation class, and αj,p,k(pk /Py) = [∂ln Aj,p(yj,p) / ∂ln pk] so that

∑∑αj,p,k (pk /Py) ≠ 0 also implies that the j^th conservation or production technology for the p^th
kj

class is non-homothetic.

Model Estimation

For our analysis, this cost-function based technology adoption approach is assumed to model
the economic decision-making process of producers allocating acres between crop production and
infield and perimeter-field structural conservation practices (i.e., Aj,p, alternative field-level
production technology choices). Because the dependent variable in this analysis is continuous, we
use a Generalized Estimating Equations (GEE) procedure to estimate two models. The GEE
estimation procedure (Liang and Zeger, 1986) accounts for the correlation between adoption
decisions measured as a continuous variable, while maintaining the theoretical integrity of a
multinomial discrete-choice model typically used in technology adoption studies. Our two cost-
function models estimate field-level, producer acreage allocation decisions for corn, first, as a
function of normalized production input costs (prices) and structural technology class and

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