Estimation and comparison of the performance of low-input and conventional agricultural production systems

Sustainable intensification through low-input production systems can mitigate agriculture's environmental impact while meeting the food demands of a growing population. However, comparing the performance of low-input system to conventional one, particularly in terms of productivity and yield, is challenging due to selection bias. To effectively develop policies promoting the adoption of low-input system and assess their impact on pesticide use and yields, it is crucial to employ an econometric framework that addresses these issues. This article proposes an endogenous switching approach combined with control functions to tackle selection bias and input endogeneity simultaneously. Using unbalanced panel data on Swiss wheat production, which includes both low-input and conventional systems, our framework reveals significant disparities in input demands and production functions. These differences have implications for how farmers, their input demands, and yields respond to public policies targeting pesticide use.