Date Available


Year of Publication


Degree Name

Master of Science (MS)

Document Type





Agricultural Economics

First Advisor

Dr. Jerry R. Skees


The livestock industry in the United States has experienced significant concentration and vertical integration in recent years. This change has resulted in greater observed levels of pollution attributed to concentrated animal feeding operations (CAFO) and society has attempted to use regulation to remedy these problems. Despite regulation at the federal and local level no documented improvement in water quality has been observed to date. This thesis is concerned with the response of profit-maximizing economic agents to the form of environmental regulation adopted at the federal level. A theoretical model of firm profit is proposed and analyzed using comparative statics to derive a variety of firm and policy relevant results. A qualitative discussion of monitoring and enforcement aspects of regulation and transaction costs in public policy implementation is provided. Results suggest that the form that regulation has taken fails to address the economic decision making process of the firm and thus fails to create incentives for more environmentally benign behavior.