Pesticide inputs, harvest timing, and functional forms

Abstract

An accurate assessment of the value of pesticides to producers gives information to policy makers which may be useful in formulating policy regarding pesticides. Since the marginal products of pesticide inputs are a function of the functional specification of the production function, it is important to accurately specify the production function. Past empirical studies have suggested that the use of the Cobb-Douglas production function overestimates pesticide productivity. In addition to the pesticide productivity issue, this study also examines the economic importance of harvest-timing in crop production; most studies of supply response have not examined the harvesting decision explicitly. Results show that any function that can approximate the true function well in the neighborhood of the sample mean will give about the same estimate of mean marginal product. Findings suggest that if the purpose of a study is to estimate the marginal productivity and elasticity of inputs at its mean level, then the choice of the functional form may not matter. One of the purposes of this study is to reexamine the issue of relationship of pesticide productivity and functional form using primary level data on Ecuadorian potato production.