Journal Article

The Economics and Econometrics of Damage Control

Atanu Saha, C. Richard Shumway and Arthur Havenner

in American Journal of Agricultural Economics

Published on behalf of Agricultural and Applied Economics Association

Volume 79, issue 3, pages 773-785
Published in print August 1997 | ISSN: 0002-9092
Published online August 1997 | e-ISSN: 1467-8276 | DOI: https://dx.doi.org/10.2307/1244419
The Economics and Econometrics of Damage Control

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Concern for the potentially harmful side effects of agricultural chemical inputs, especially pesticides, highlights the need to accurately determine the economic levels of their use. We consider three model specification issues: interaction of direct production inputs with damage control inputs in damage abatement, justification for a priori exclusion of production inputs from the abatement function, and the motivations and consequences of alternative stochastic specifications. Empirical analysis using farm-level data shows that misspecification of the stochastic element in the production function can overestimate the marginal physical productivity of pesticides and grossly underestimate the responsiveness of demand to increases in pesticide prices.

Keywords: damage control; pesticide usage; stochastic production; yield variability; Q120; Q160; Q210

Journal Article.  0 words. 

Subjects: Renewable Resources and Conservation ; Agricultural Economics

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