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Effective Costs and Chemical Use in United States Agricultural Production: Using the Environment as a “Free” Input
Author(s) -
Morrison Paul Catherine J.,
Ball V. Eldon,
Felthoven Ronald G.,
Grube Arthur,
Nehring Richard F.
Publication year - 2002
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/1467-8276.00356
Subject(s) - shadow price , production (economics) , agriculture , quality (philosophy) , economics , agricultural productivity , natural resource economics , function (biology) , substitution (logic) , agricultural economics , pesticide , environmental economics , agricultural engineering , econometrics , microeconomics , computer science , mathematics , mathematical optimization , engineering , ecology , philosophy , agronomy , epistemology , evolutionary biology , programming language , biology
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.