Abstract
AbstractPesticide use reduces the variation in crop yields at the expense of potentially negative consequences to farmers and their family members. This article examines the trade‐off between decreasing production risk and increasing health ambiguity because of pesticide use. We find that under ambiguity, pesticide application decreases the variation in health outcomes, whereas under risk, it decreases the expected value of health outcomes. Health insurance protects health from the pesticide damage but not from the ambiguity effect of pesticide application, and the optimal choice of pesticide application does not depend on the farmer's health preferences over risk or ambiguity. However, in the absence of health insurance, ambiguity can increase or decrease the optimal choice of pesticide compared to the risk case. This suggests that public policies around pesticide usage should be designed to reflect and account for the multitude of behavioral responses in the presence of ambiguity and risk.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
