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Damage Control and Increasing Returns
Author(s) -
Fox Glenn,
Weersink Alfons
Publication year - 1995
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 - 10.2307/1243886
Subject(s) - productivity , damage control , control (management) , production (economics) , economics , microeconomics , management , oceanography , macroeconomics , geology
The indirect action of damage control inputs means the marginal productivity of these inputs depends on their effectiveness in controlling the level and size of production loss caused by the damage agent. Increasing returns to damage control inputs can occur even when control and damage functions are concave. The result implies more attention needs to be paid to the functional form selection for damage and control functions in empirical work on pest control and other types of damage control inputs. In addition, the possibility of increasing returns may undermine the general use of taxes to reduce pesticide use.