Oxford University Press
American Journal of Agricultural Economics
Concentrated Animal Feeding Operations (CAFOs) – animal feeding operations with over 1,000 animal units in confined spaces – have proliferated over the past 30 years in the United States. CAFOs provide operational cost savings, but higher animal concentrations in confined spaces can generate external costs, e.g., non-point source water pollution. In this study, we improve on previous research designs to estimate the relationship between the growth in CAFOs and surface water quality using longitudinal data on a large spatial scale. We use a panel dataset from 1995-2017 that links CAFO intensity with nearby surface water quality readings in Wisconsin to perform our analysis. Leveraging variation in CAFO intensity within hydrological regions over time, we find that increasing CAFO intensity increases the levels of nutrients, specifically total phosphorus and ammonia, in surface water; adding one CAFO to a Hydrologic Unit Code-8 (HUC8) region leads to a 1.7% increase in total phosphorus levels and a 2.7% increase in ammonia levels relative to sample mean levels. These effects imply that, in our sample, the average total phosphorus reading is 10.9% higher and the average ammonia reading is 16.5% higher than they would be in a counterfactual world without CAFOs. Using these values, we find that CAFOs in Wisconsin account for losses in non-market surface water quality benefits of approximately $35-$51 per household per year ($82-$119 million per year for the entire state).
Raff, Zach and Meyer, Andrew G., "CAFOs and Surface Water Quality: Evidence from Wisconsin" (2022). Economics Faculty Research and Publications. 621.
Available for download on Tuesday, January 02, 2024