@article{Zhao:250017,
      recid = {250017},
      author = {Zhao, Tianli and Poe, Gregory L. and Boisvert, Richard N.},
      title = {Management Areas and Fixed Costs in the Economics of Water  Quality Trading},
      address = {2015-05},
      number = {642-2016-43980},
      series = {WP},
      pages = {52},
      year = {2015},
      abstract = {Hung and Shaw’s (2005) trading-ratio system is modified to  accommodate a
management area approach wherein emissions  sources are organized by impacts on identified
“hot spots”  and trading accounts for fixed as well as variable costs.  An empirical example of
phosphorus trading in a watershed  with 22 potential traders demonstrates that marginal  cost
trading using a trading-ratio system yield nominal  cost savings of less than 1% at the watershed
level  relative to the no-trade situation. A management area  approach that accounts for fixed costs
achieves over 13% in  costs savings. The pattern of cost-effective trades is  modeled using a
mixed-integer approach.},
      url = {http://ageconsearch.umn.edu/record/250017},
      doi = {https://doi.org/10.22004/ag.econ.250017},
}