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Abstract
This study describes the development of bio economic models examining the economic and water quality impact of various proposed policy options in the Upper Waikato catchment. In the first phase nitrogen emissions are determined for representative farming systems using the Overseer nutrient budget model. These model components are integrated into an economic model, which predicts producer responses to various policy options. The second phase determines catchment wide costs and water quality impacts of riparian buffers by combining geographic information system, bio economic modelling and experimental data. The results of the study signals directions for policy initiatives and further analysis exploring policy design and all costs associated with production adjustment.