Two-goal regional environmental policy: The case of the Santa Ana river basin

In determining public policy measures, the value of information about the functional relationships between targets and instruments can hardly be understated. In the present paper these macrorelations are obtained for a competitive industry by way of aggregation over many individual firms following simple behavioristic patterns. With the exact knowledge of the macrorelations, obtaining the numerical values of the instruments becomes a simple mathematical programming problem. These principles are applied in examination of the water pollution problems generated by the dairy industry in the Santa Ana River Basin where local governments face the problem of controlling environmental quality with minimum opportunity costs in terms of output.