Damage Control Econometrics: Functional Specification and Pesticide Productivity

Empirical studies of pesticide productivity have often concluded that the value of marginal product of pesticide exceeds marginal factor cost despite anecdotal and other evidence to the contrary. This article presents estimates of pesticide productivity derived from alternative functional specifications of pesticide involvement in production. Results suggest that explanation of the magnitude of pesticide productivity estimates obtained in empirical studies may lie somewhere other than with functional specification.