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Humboldt-Universität zu Berlin - Lebenswissenschaftliche Fakultät - Quarterly Journal of International Agriculture

Quarterly Journal of International Agriculture No. 2/05


Estimation of pesticide demand using farm level data:
a case study of coffee production in Costa Rica

Stefan Agne
European Commission, Beijing Delegation, China, and

Hermann Waibel
University of Hanover, Germany


Abstract

This paper examines the estimation of the elasticity of pesticide demand in Costa Rica based on farm-level panel data. Two different models of dual profit functions were used in the estimation process: (i) a single equation panel model and (ii) a system of seemingly unrelated regressions. The data for the estimation were collected in a recall survey covering three consecutive years on 325 coffee farms. The single equation panel model yielded results that are consistent with economic theory while the results obtained with the system of demand equations were less conclusive. Results of this empirical research indicate that pesticide taxation could be an effective means to reduce pesticide overuse in developing countries.

Keywords: economics, coffee, demand elasticity, pesticides, taxation

Vol. 44 (2005), No. 2: 141-153