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Priorities in Cost Sharing for Soil and Water Conservation: A Revealed Preference Study

A number of studies have questioned how successfully paid land diversion has been adapted to address broad environmental policy concerns. Similar evaluations of cost-sharing programs have not been performed. This paper uses a revealed preference approach to estimate the implicit decision criteria used to allocate federal cost-sharing funds in Maryland, during the fiscal years 1994 through 1996. Funds appear to have been awarded preferentially to projects that enhanced agricultural productivity and farm profitability. In contrast to findings regarding the CRP, however, our results do not indicate that cost share awards in Maryland were inconsistent with stated environmental quality priorities. (JEL Q24, Q25)