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LEVELS OF PEST CONTROL AND UNCERTAINTY OF BENEFITS

LEVELS OF PEST CONTROL AND UNCERTAINTY OF BENEFITS Australian JournalofAgriculturalEconomics, Vol. 30, Nos 2 and 3 (Aug/Dec 1986), pp. 157-161 LEVELS OF PEST CONTROL AND UNCERTAINTY OF BENEFITS CLEM TISDELL* University of Newcastle, NSW 2308 There seems to be a widespread view that greater uncertainty about private benefits from pest control, for instance because of greater uncertainty about the level of infestation of a pest population, results in greater levels of private pest control. The amount of pesticide (for example, the quantity of a herbicide used for weed control) or effort applied in controlling a pest is often believed to rise as uncertainty about the economic value or effectiveness of the control increases. This matter does not appear to have been explored extensively in the relevant economic literature, although some writers suggest that an effect of this type arises because of risk aversion on the part of landholders (Norgaard 1976; Feder 1979). It is shown here that such an effect can arise even under risk neutrality. Furthermore, general conditions involving convexity of functions that determine whether increased uncertainty about the effectiveness of a pest control measure raises or reduces the optimal value of the relevant pest control variable are specified. In the concluding section some possible policy http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Australian Journal of Agricultural Resource Economics Wiley

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Publisher
Wiley
Copyright
Copyright © 1986 Wiley Subscription Services, Inc., A Wiley Company
ISSN
1364-985X
eISSN
1467-8489
DOI
10.1111/j.1467-8489.1986.tb00663.x
Publisher site
See Article on Publisher Site

Abstract

Australian JournalofAgriculturalEconomics, Vol. 30, Nos 2 and 3 (Aug/Dec 1986), pp. 157-161 LEVELS OF PEST CONTROL AND UNCERTAINTY OF BENEFITS CLEM TISDELL* University of Newcastle, NSW 2308 There seems to be a widespread view that greater uncertainty about private benefits from pest control, for instance because of greater uncertainty about the level of infestation of a pest population, results in greater levels of private pest control. The amount of pesticide (for example, the quantity of a herbicide used for weed control) or effort applied in controlling a pest is often believed to rise as uncertainty about the economic value or effectiveness of the control increases. This matter does not appear to have been explored extensively in the relevant economic literature, although some writers suggest that an effect of this type arises because of risk aversion on the part of landholders (Norgaard 1976; Feder 1979). It is shown here that such an effect can arise even under risk neutrality. Furthermore, general conditions involving convexity of functions that determine whether increased uncertainty about the effectiveness of a pest control measure raises or reduces the optimal value of the relevant pest control variable are specified. In the concluding section some possible policy

Journal

The Australian Journal of Agricultural Resource EconomicsWiley

Published: Dec 12, 1986

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