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