Pesticides,Preference Heterogeneity and Environmental Taxes |
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| Authors: | Ali Chalak Kelvin Balcombe Alastair Bailey Iain Fraser |
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| Institution: | Ali Chalak is with ICS Consulting, UK, London. Kelvin Balcombe is at the Department of Agricultural and Food Economics, University of Reading. Alistair Bailey and Iain Fraser are both in the Applied Economics and Business Management Section, Kent Business School, University of Kent, Wye Campus, Wye, Kent TN25 5AH, UK. Tel: 0207 59 42623, E‐mail: for correspondence. The authors acknowledge the financial support provided by the Rural Economy and Land Use Grant (RES‐224‐25‐0093). The comments of two anonymous referees and participants at the 80th Annual Agricultural Economics Society Conference are also gratefully acknowledged. |
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| Abstract: | In this paper we present results from two choice experiments (CE), designed to take account of the different negative externalities associated with pesticide use in agricultural production. For cereal production, the most probable impact of pesticide use is a reduction in environmental quality. For fruit and vegetable production, the negative externality is on consumer health. Using latent class models we find evidence of the presence of preference heterogeneity in addition to reasonably high willingness to pay (WTP) estimates for a reduction in the use of pesticides for both environmental quality and consumer health. To place our WTP estimates in a policy context we convert them into an equivalent pesticide tax by type of externality. Our tax estimates suggest that pesticide taxes based on the primary externality resulting from a particular mode of agricultural production are a credible policy option that warrants further consideration. |
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| Keywords: | Choice experiments latent class models pesticide taxes pesticides willingness to pay H23 Q10 Q51 |
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