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Effective Costs and Chemical Use in United States Agricultural Production: Using the Environment as a “Free” Input

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Author Info

  • Catherine J. Morrison Paul
  • V. Eldon Ball
  • Ronald G. Felthoven
  • Arthur Grube
  • Richard F. Nehring

Abstract

A cost-function-based production model is used to represent patterns of input use and output production in U.S. agriculture, and the implied costs of induced reductions in risk from agricultural chemicals (“bad outputs”). We estimate and evaluate shadow values for these harmful outputs, and the implied input- and output-specific substitution patterns, with a focus on the impacts on pesticide demand and its quality and quantity components. Using state-level data we find these measures to be statistically significant, vary substantively by region, and imply increased demand for effective pesticides associated with improvements in quality from embodied technology. Copyright 2002, Oxford University Press.

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File URL: http://hdl.handle.net/10.1111/1467-8276.00356
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Bibliographic Info

Article provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.

Volume (Year): 84 (2002)
Issue (Month): 4 ()
Pages: 902-915

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Handle: RePEc:oup:ajagec:v:84:y:2002:i:4:p:902-915

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Cited by:
  1. Managi, Shunsuke, 2006. "Testing Increasing Returns to Pollution Abatement in Pesticides," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25524, International Association of Agricultural Economists.
  2. Gerald Granderson, 2006. "Externalities, efficiency, regulation, and productivity growth in the U.S. electric utility industry," Journal of Productivity Analysis, Springer, vol. 26(3), pages 269-287, December.

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