Primal versus Dual Methods for Measuring the Impact of Ozone on Cash Grain Farmers

Abstract

A comparison of primal and dual methods for measuring the impact of ozone on the profits and outputs of Illinois cash grain farms uses the sample data in Mjelde et al. after adding an additional year of data and making refinements. On the basis of the evidence presented, it is not possible to say definitively whether the production or profit function specification is superior. Both models seem to fit the data well and give plausible results in terms of indicating if an effect is present. While ozone has been shown to be deleterious to an individual farmer, however, this does not imply that reductions in ozone levels throughout the nation would lead to increased farmer profits. It could lead to an increase in supply, which would likely cause a decrease in price. Other factors highly correlated with ozone could also be responsible for the observed effect. 7 references, 1 table.