Peach Prices In California In The Presence Of Technological Change In The Agricultural Pesticide Industry
The potentially adverse effects of pesticides in wide use are causing concern to grow in the agricultural community. Minimizing the risks to human health and the environment created by agricultural pesticides has become a very important issue. The United States Environmental Protection Agency (EPA) has set a high priority on registering safer pesticides. According to the EPA, more than 1 billion pounds of active pesticide ingredients are used in the United States each year. Americans are exposed to pesticides every day through food consumption, cleaning products, and home and work environments. The agricultural pesticide industry has experienced an influx of changes during the past decade. Two of the primary changes affecting the pesticide industry are the introduction of new technology and EPA regulatory changes. On the regulatory front, the EPA requires manufacturers to register and test pesticides before they appear on the market. By 2006, the EPA will review old pesticides to ensure that they meet new safety requirements. These regulatory initiatives have contributed to the industry drive to develop safer and more "environmentally friendly" products for use in agricultural pest control. Technological changes consist of the introduction of new pesticides that are considered to be safer for both humans and the environment. As new technologies and regulatory initiatives are undertaken to ensure an improvement in both the safety of human health and the environment, one must consider how these changes may affect consumers. Specifically, an analysis should be conducted to determine whether or not the technological and regulatory changes have an effect on consumer prices. The recent developments in the agricultural pesticide industry provide several reasons to believe structural change has been occurring in economic relationships that determine peach prices in California. Therefore, we use a vector autoregressive (VAR) model to forecast peach prices by allowing parameters to vary with time. VAR models differ from standard econometric analyses of structural relationships in that they do not apply the usual exclusion restrictions to specify a priori which variables appear in which equations. Instead, a set of distributed lag equations is used to model each variable as a function of other variables in the structural system (Bessler, 1984). The objective of this paper is to forecast peach prices and evaluate dynamic relationships in the peach industry in the presence of technological and regulatory change. A VAR model that explicitly recognizes structural change will be used to forecast peach prices in California. Changes in dynamic relationships between peach prices and relevant economic variables will be considered.
|Date of creation:||2003|
|Contact details of provider:|| Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202|
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
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.:
- David A. Bessler, 1984. "An Analysis of Dynamic Economic Relationships: An Application to the U.S. Hog Market," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 32(1), pages 109-124, 03.
- Goodwin, Barry K., 1992. "Forecasting Cattle Prices In The Presence Of Structural Change," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 24(02), December.
- Goodwin, Barry K., 1992. "Forecasting Cattle Prices in the Presence of Structural Change," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 24(02), pages 11-22, December.
When requesting a correction, please mention this item's handle: RePEc:ags:aaea03:22089. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.