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The Econometrics of Damage Control: Why Specification Matters
Author(s) -
Lichtenberg Erik,
Zilberman David
Publication year - 1986
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 - 10.2307/1241427
Subject(s) - productivity , damage control , control (management) , production (economics) , function (biology) , econometrics , economics , econometric model , capital (architecture) , control function , computer science , microeconomics , macroeconomics , history , oceanography , geology , management , archaeology , evolutionary biology , biology
The contribution of damage control agents to production differs fundamentally from that of standard inputs (lands, labor, capital). This paper develops an econometric model based on the key characteristics of damage control agents and examines its properties. It demonstrates that standard production function specifications overestimate damage control agent productivity and have erroneous implications for the evolution of damage control agent productivity and use in response to changing environments (e.g., the spread of pest resistance). It also proposes several alternative specifications and discusses methods for estimating them.