Abstract
ABSTRACT. This research presents a competitive dynamic model that endogenously evaluates the economics of regulatory tax‐policy options. This model is then applied to an irrigated corn production area west of Kearney, Nebraska, where the average groundwater contamination level from nitrates is reported to be 8.7 parts per million (ppm). Results indicate that no regulatory policies are necessary for maintaining potable groundwater quality with either a surge‐flow irrigation system or a sprinkler irrigation system. In areas where conventional furrow irrigation technology is being used, higher net economic benefits result from the adoption of a variable‐tax on nitrogen fertilizer use, followed by a constant‐unit tax and a pollution tax.
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