Implications of simultaneity in a physical damage function
A modeler must often rely on highly simplified representations of complex physical systems when analyzing associated economic issues. Herein, we consider a management problem in which a bioeconomic system exhibits simultaneity in processes governing productivity and damage. In this case, it may benefit the producer to sacrifice productivity to reduce the costs associated with increased damage. We specify empirically a structural damage relationship that explains the biological process by which an invasive species damages a host and estimate the structural model and its reduced form with an exceptional dataset on infestation of olives by the olive fruit fly. We contrast the results of these models with the approach typically taken in the economic literature, which expresses damage as a function of pest density. The population-based approach introduces significantly greater bias into the individual grower's choice of damage-control inputs than estimates based on the structural model.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mark Ottoni Wilhelm, 2008. "Practical Considerations for Choosing Between Tobit and SCLS or CLAD Estimators for Censored Regression Models with an Application to Charitable Giving," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(4), pages 559-582, August.
- Gershon Feder, 1979. "Pesticides, Information, and Pest Management under Uncertainty," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(1), pages 97-103.
- Regev, Uri & Shalit, Haim & Gutierrez, A. P., 1983. "On the optimal allocation of pesticides with increasing resistance: The case of alfalfa weevil," Journal of Environmental Economics and Management, Elsevier, vol. 10(1), pages 86-100, March.
- Uri Regev & Andrew P. Gutierrez & Gershon Feder, 1976. "Pests as a Common Property Resource: A Case Study of Alfalfa Weevil Control," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 58(2), pages 186-197.
- Vuong, Quang H, 1989. "Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses," Econometrica, Econometric Society, vol. 57(2), pages 307-333, March.
- Smith, Richard J & Blundell, Richard W, 1986. "An Exogeneity Test for a Simultaneous Equation Tobit Model with an Application to Labor Supply," Econometrica, Econometric Society, vol. 54(3), pages 679-685, May.
- Christiaans, Thomas & Eichner, Thomas & Pethig, Rudiger, 2007.
"Optimal pest control in agriculture,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 31(12), pages 3965-3985, December.
- Thomas Christiaans & Thomas Eichner & RÃ¼diger Pethig, 2005. "Optimal Pest Control in Agriculture," CESifo Working Paper Series 1507, CESifo Group Munich.
- Thomas Christiaans & Thomas Eichner & Rüdiger Pethig, 2005. "Optimal pest control in agriculture," Volkswirtschaftliche Diskussionsbeiträge 122-05, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
- Feder, G. & Regev, U., 1975. "Biological interactions and environmental effects in the economics of pest control," Journal of Environmental Economics and Management, Elsevier, vol. 2(2), pages 75-91, December.
- William Greene, 2004. "Fixed Effects and Bias Due to the Incidental Parameters Problem in the Tobit Model," Econometric Reviews, Taylor & Francis Journals, vol. 23(2), pages 125-147.
- Adams, R. M. & Crocker, T. D. & Thanavibulchai, N., 1982. "An economic assessment of air pollution damages to selected annual crops in Southern California," Journal of Environmental Economics and Management, Elsevier, vol. 9(1), pages 42-58, March.
- Garcia, Philip & Dixon, Bruce L. & Mjelde, James W. & Adams, Richard M., 1986. "Measuring the benefits of environmental change using a duality approach: The case of ozone and Illinois cash grain farms," Journal of Environmental Economics and Management, Elsevier, vol. 13(1), pages 69-80, March.
- Newey, Whitney K., 1987. "Specification tests for distributional assumptions in the Tobit model," Journal of Econometrics, Elsevier, vol. 34(1-2), pages 125-145.
- Bruce A. Babcock & Erik Lichtenberg & David Zilberman, 1992. "Impact of Damage Control and Quality of Output: Estimating Pest Control Effectiveness," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(1), pages 163-172.
- Babcock, Bruce A. & Lichtenberg, E. & Zilberman, David, 1992. "Impact of Damage Control and Quality of Output: Estimating Pest Control Effectiveness," Staff General Research Papers Archive 10589, Iowa State University, Department of Economics.
- Plant, Richard E. & Mangel, Marc & Flynn, Lawrence E., 1985. "Multiseasonal management of an agricultural pest II: the economic optimization problem," Journal of Environmental Economics and Management, Elsevier, vol. 12(1), pages 45-61, March.
- Kenn Ariga & Giorgio Brunello, 2006. "Are Education and Training Always Complements? Evidence from Thailand," ILR Review, Cornell University, ILR School, vol. 59(4), pages 613-629, July.
- E. J. Working, 1927. "What Do Statistical "Demand Curves" Show?," The Quarterly Journal of Economics, Oxford University Press, vol. 41(2), pages 212-235.
- Erik Lichtenberg & David Zilberman, 1986. "The Econometrics of Damage Control: Why Specification Matters," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(2), pages 261-273.
- Richard W. Blundell & Richard J. Smith, 1989. "Estimation in a Class of Simultaneous Equation Limited Dependent Variable Models," Review of Economic Studies, Oxford University Press, vol. 56(1), pages 37-57.
- Atanu Saha & C. Richard Shumway & Arthur Havenner, 1997. "The Economics and Econometrics of Damage Control," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 773-785.
- Douglas D. Parker & David Zilberman, 1993. "Hedonic Estimation of Quality Factors Affecting the Farm-Retail Margin," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(2), pages 458-466.
- Norwood, F. Bailey & Marra, Michele C., 2003. "Pesticide Productivity: Of Bugs and Biases," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(03), December. Full references (including those not matched with items on IDEAS)