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Effective Costs and Chemical Use in United States Agricultural Production: Using the Environment as a “Free” Input

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  • Catherine J. Morrison Paul
  • V. Eldon Ball
  • Ronald G. Felthoven
  • Arthur Grube
  • Richard F. Nehring

Abstract

A cost-function-based production model is used to represent patterns of input use and output production in U.S. agriculture, and the implied costs of induced reductions in risk from agricultural chemicals (“bad outputs”). We estimate and evaluate shadow values for these harmful outputs, and the implied input- and output-specific substitution patterns, with a focus on the impacts on pesticide demand and its quality and quantity components. Using state-level data we find these measures to be statistically significant, vary substantively by region, and imply increased demand for effective pesticides associated with improvements in quality from embodied technology. Copyright 2002, Oxford University Press.

Suggested Citation

  • Catherine J. Morrison Paul & V. Eldon Ball & Ronald G. Felthoven & Arthur Grube & Richard F. Nehring, 2002. "Effective Costs and Chemical Use in United States Agricultural Production: Using the Environment as a “Free” Input," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(4), pages 902-915.
    • Handle: RePEc:oup:ajagec:v:84:y:2002:i:4:p:902-915
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    File URL: http://hdl.handle.net/10.1111/1467-8276.00356
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    Cited by:

    1. Managi, Shunsuke, 2006. "Are there increasing returns to pollution abatement? Empirical analytics of the Environmental Kuznets Curve in pesticides," Ecological Economics, Elsevier, vol. 58(3), pages 617-636, June.
    2. Gerald Granderson, 2006. "Externalities, efficiency, regulation, and productivity growth in the U.S. electric utility industry," Journal of Productivity Analysis, Springer, vol. 26(3), pages 269-287, December.
    3. Jeanneaux, Philippe & Latruffe, Laure, 2016. "Modelling pollution-generating technologies in performance benchmarking: Recent developments, limits and future prospects in the nonparametric frameworkAuthor-Name: Dakpo, K. Hervé," European Journal of Operational Research, Elsevier, vol. 250(2), pages 347-359.
    4. Chapple, Wendy & Paul, Catherine J. Morrison & Harris, Richard, 2005. "Manufacturing and corporate environmental responsibility: cost implications of voluntary waste minimisation," Structural Change and Economic Dynamics, Elsevier, vol. 16(3), pages 347-373, September.
    5. Ashley E. Larsen & Steven D. Gaines & Olivier Deschênes, 2017. "Agricultural pesticide use and adverse birth outcomes in the San Joaquin Valley of California," Nature Communications, Nature, vol. 8(1), pages 1-9, December.
    6. Daniel C. Voica & Troy G. Schmitz, 2022. "Trading risk for ambiguity: Production versus health under pesticide application," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(4), pages 1327-1342, August.
    7. Shilei Pan & Chenhui Di & Abbas Ali Chandio & Ghulam Raza Sargani & Huaquan Zhang, 2022. "Investigating the Impact of Grain Subsidy Policy on Farmers’ Green Production Behavior: Recent Evidence from China," Agriculture, MDPI, vol. 12(8), pages 1-19, August.
    8. Pascal L. Ghazalian & Bruno Larue & Gale E. West, 2010. "Best Management Practices and the Production of Good and Bad Outputs," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(3), pages 283-302, September.
    9. Philippe Barla & Sergio Perelman, 2005. "Sulphur emissions and productivity growth in industrialised countries," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 76(2), pages 275-300, June.
    10. Song, Malin & Mangla, Sachin Kumar & Wang, Jianlin & Zhao, Jiajia & An, Jiafu, 2022. "Asymmetric information, “coal-to-gas” transition and coal reduction potential: An analysis using the nonparametric production frontier method," Energy Economics, Elsevier, vol. 114(C).
    11. Christos A. Damalas & Ilias G. Eleftherohorinos, 2011. "Pesticide Exposure, Safety Issues, and Risk Assessment Indicators," IJERPH, MDPI, vol. 8(5), pages 1-18, May.

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