Valuing Output Losses and Potential Pesticide Reduction in French Wine Production: Integrating Agronomic Principles in Production Frontier

This article uses agronomic principles in production frontier analysis to value output losses and potential pesticide reduction. It extends the distinction of production inputs (growth and facilitating inputs) to disentangle the output losses due to pests and technical inefficiency under a damage control specification. The trade-off between both output loss sources allows for assessing the potential for pesticide reduction without impeding the production level or profitability. Our application is to a sample of French wine producers between 2002 and 2022. Our results reveal that technical efficiency is about 72%, while the damage control level is 62.5%. This implies that 28% of the potential output is lost due to technical inefficiency, and 38.5% of the loss is associated with pests and weather damages. Examining the trade-off between both output losses reveals that a 1% increase in technical efficiency, which for maintaining the same production level implies a decrease of damage control by about 0.99%, requires a decrease in pesticides by 55.8% ceteris paribus.(This abstract was borrowed from another version of this item.)