Specification and Estimation of Production Functions Involving Damage Control Inputs: A Two-Stage, Semiparametric Approach |
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Authors: | Timo Kuosmanen Diemuth Pemsl Justus Wesseler |
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Affiliation: | Timo Kuosmanen is assistant professor and Justus Wesseler associate professor, Environmental Economics and Natural Resources Group, Social Science Department, Wageningen University, The Netherlands. Diemuth Pemsl is researcher at the Chair of Development and Agricultural Economics, Faculty of Economics and Management, University of Hanover, Germany. |
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Abstract: | Productivity assessment of damage control inputs (such as pesticides) is complicated because their effect depends on the exposure to damage agents (such as pests). We discuss some open specification and estimation issues. The contribution is threefold. First, we elaborate the separability conditions for the damage control function and production function. Second, we employ a two-stage semiparametric technique to combine attractive features of both nonparametric and parametric approaches. Third, we model the interaction between pest exposure and damage control inputs by using slope dummies. An application to productivity analysis of small scale Bt cotton production in China illustrates the approach. |
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Keywords: | biotechnology damage control data envelopment analysis (DEA) productivity analysis semiparametric model |
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