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Effective Costs and Chemical Use in US Effective Costs and Chemical Use in US of Using the Environment as a "Free" Input

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Author Info
Catherine Morrison Paul (University of California, Davis)
V. Eldon Ball (Economic Research Service, U.S. Department of Agriculture)
Ronald Felthoven (National Oceanic and Atmospheric Administration, Seattle, WA)
Richard Nehring (Economic Research Service, U.S. Department of Agriculture)

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Abstract

This study uses a cost-function-based model of production processes in the U.S. agricultural sector to represent producers' input and output decisions, and the implied costs of reductions in risk associated with leaching and runoff from agricultural chemical use. The model facilitates evaluation of the statistical significance of measured shadow values of "bad" outputs and their input- and output-specific components. Of special interest are the impacts on pesticide demand and its quality and quantity aspects. The shadow values of risk reduction are statistically significant, and imply increased demand for "effective" pesticides that come mainly from embodied technology leading to improvements in quality.

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Publisher Info
Paper provided by Department of Agricultural & Resource Economics, UC Davis in its series Department of Agricultural & Resource Economics, UC Davis, Working Paper Series with number 1034.

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Date of creation: 01 May 2000
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Handle: RePEc:cdl:aredav:1034

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  1. Fulginiti, Lilyan E & Perrin, Richard K, 1993. "Prices and Productivity in Agriculture," The Review of Economics and Statistics, MIT Press, vol. 75(3), pages 471-82, August. [Downloadable!] (restricted)
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