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A Composed‐Error Model for Estimating Pest‐Damage Functions and the Impact of the Western Corn Rootworm Soybean Variant in Illinois
Author(s) -
Mitchell Paul D.,
Gray Michael E.,
Steffey Kevin L.
Publication year - 2004
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/j.0092-5853.2004.00582.x
Subject(s) - western corn rootworm , pest analysis , variance (accounting) , yield (engineering) , econometrics , statistics , mathematics , economics , biology , botany , materials science , accounting , metallurgy
We describe a composed‐error model for estimating pest‐damage functions. The composed‐error model, originally developed to account for statistical noise when estimating technical efficiency, removes the effect of experimental errors when estimating the variance of yield loss from pest damage. As a result, the estimated variance of yield loss is often less than for a conventional model, which has economic implications when the analysis incorporates risk aversion. We find that, depending on the level of risk aversion, the western corn rootworm soybean variant reduces farmer certainty‐equivalent returns 16–26% more with a conventional model than with the composed‐error model.