ABSTRACT
Let p(t) be the price of the crop outp ut,/(zi, *), normalized with respect to the price of any new crops associated with z2, and cj(/) and c2(t) are the costs of the respective input packages.67 The behavior of the farming household in response to soil erosion is therefore determined by the impact of the soil on profits, over T years
PV = r e rt[ p f { z u x ) - CiZi ~ c2z2] d t , [3]
where r is the farmer’s discount rate.8
