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The Effect of the Environmental Quality Incentives Program on Ambient Water Quality in the United States

Event Type
Program in Environmental & Resource Economics (pERE)
426 Mumford Hall
wifi event
Sep 18, 2023   12:00 - 1:00 pm  
Hsin-Chieh Hsieh, Illinois Grad Student, Dept. ACE
Originating Calendar
ACE Seminars

This study evaluates the effect of the U.S. Department of Agriculture’s Natural Resource Conservation Service (NRCS) administered Environmental Quality Incentives Program (EQIP) on ambient water quality (i.e., total inorganic nitrogen). The EQIP is the largest and longest-running agriculture conservation financial and technical assistance program targeting working lands and supports national policy goals to reduce nonpoint source pollution in impaired watersheds. However, the econometric evidence of the effect of working lands agri-environmental programs on ambient water quality remains limited. Recent peer-reviewed research has used EQIP contract data to evaluate the program’s impact on water quality but suffers from a number of limitations. Our study provides a more comprehensive analysis than prior work by including the entire program duration and the period before EQIP was first authorized in the 1996 farm bill. The data we employ to identify this effect are watershed-level EQIP treatment acres (conservation practices or contracts) and dollars of cost-share assistance from 1996 to the present paired with water quality data where monitoring stations are located. Each monitoring location measurement reflects drainage from upstream areas with varying levels of treatment or no treatment in the pre-intervention period. The empirical strategy to identify the impact of EQIP on nutrient and sediment pollution levels is a two-way fixed-effects linear model that controls for drought, recent precipitation, land use, gross farm income, and cash crop yield. This observational study will inform policymakers and researchers about the environmental benefits of EQIP and whether realized impacts of conservation contracts on ambient water quality are consistent with hydrological simulation modeling.

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