THE ECONOMICS OF A STOCK POLLUTANT: ALDICARB ON LONG ISLAND
Conrad, Jon M.; Olson, Lars J.
A stock pollutant is a residual waste that can accumulate or degrade over time. Aldicarb was a pesticide used by farmers growing fruit and vegetables. Potato growers on eastern Long Island, New York, used aldicarb from 1975 to 1979 to control the Colorado potato beetle and the golden nematode. In August of 1979 aldicarb residues were detected in well water, and subsequent testing found more than 2,000 wells with concentrations in excess of the New York State health standard of 7 parts per billion (ppb). Aldicarb was banned from use on Long Island after 1979. In this paper we develop a dynamic model of a stock pollutant. The model is calibrated for aldicarb on eastern Long Island and steady-state solutions for static profit-maximizing rate and the maximization of discounted net benefits (welfare}are estimated. The New York State health standard of 7 ppb is associated with a pesticide application rate less than one-tenth the profit-maximizing rate and it contamination at about $1.5 million. Simulations indicate that the average concentration of aldicarb is not expected to decline below 7 ppb until 1996.
WP 1990-16 November 1990
Charles H. Dyson School of Applied Economics and Management, Cornell University