Damage Control Inputs : A Comparison of Conventional and Organic Farming Systems

The economic literature on pest control exclusively assumes a non-negative marginal product of pesticides based on a monotonic non-decreasing function of damage abatement, which may bias pesticide productivity estimates. This paper proposes a specification that allows for a negative marginal product of pesticides and a damage-abating role for labour and machinery. Pesticide productivity is found to be lower than previously reported. Conventional farms are found to rely substantially on pesticides and machinery for damage abatement, whereas organic farms mainly rely on machinery use and changes in cultural practices. Productivity analyses based on the asymmetric specification suggest that pesticides are used optimally in conventional farming, which contrasts with results in previous literature