A Meta‐Analysis on the Elasticity of Demand for Pesticides

Abstract

There is an increasing policy interest in pesticide taxation schemes as a measure to reduce harmful effects of pesticide use. The effectiveness of such tax depends, however, on the price elasticity of demand for pesticides. Moreover, information on these demand elasticities and their determinants is of crucial relevance for policy‐making and normative modeling approaches. In this article, we present a meta‐analysis based on studies that have estimated pesticide demand elasticities in Europe and North America. Our meta‐analysis reveals that the own‐price elasticities of demand for pesticides are, with a median of −0.28, significantly smaller than zero, but also significantly larger than −1, i.e. to be inelastic. We find that the demand for pesticides for special crops is less elastic than that for arable and grassland. In addition, the demand for herbicides is more elastic than for other pesticides. Studies that consider only short‐term horizons and little flexibility for farmers to adjust to price changes generate significantly less elastic pesticide demands. The results also indicate that more recent studies identify lower pesticide price elasticities of demand. Furthermore, we find that peer‐reviewed studies tend to find more inelastic results compared to grey literature.

Modelling the Effects of a Glyphosate Ban on Weed Management in Silage Maize Production

“…We presume that these differences to Kehlenbeck et al (2015) reflect more detail in weed control in our model, which additionally considers adjusting 27 yields. More elastic demand for herbicides as found in our analysis is also confirmed by a recent literature review (Böcker and Finger, 2017).…”

“…In available assessments on pesticide application behaviour of farmers, mainly econometric and optimisation modelling approaches or combinations of both are applied (see Böcker and Finger, 2017). Econometric applications are usually based on historical data, for instance of pesticide applications, and are used to explain historical developments or to make recommendations on decision making.…”

The Effects of Non‐tariff Measures on Agri‐food Trade: A Review and Meta‐analysis of Empirical Evidence

“…However, MA is becoming more popular in economics, tending to focus on synthesis of results, for instance, for the price elasticity of demand (Böcker and Finger, ), the calorie‐income elasticity (Santeramo and Shabnam, ), and to food safety effects (Xavier et al ., ). It has been also used to investigate international trade: Rose and Stanley () and Havránek () analyse the effect of currency unions on trade; Disdier and Head () examine potential causes of variation in distance effect on bilateral trade; Cipollina and Salvatici () investigate the impact of preferential trade agreements on intra‐bloc trade; Li and Beghin () explain variations in estimated trade effects of technical barriers to trade.…”

Revisiting Pesticide Taxation Schemes

“…The specific structure of demand elasticities has important implications for pesticide taxation schemes. In that respect, three observations from the study by Böcker and Finger (2017) are especially important. First, elasticities differ largely across agricultural systems.…”

“…It is also used as a key argument in the policy debate such as by the German farmers' union in response to a recent proposal for a pesticide tax to be introduced in Germany (DBV, 2015). A recent meta-analysis shows that the median of pesticide demand elasticities reported in studies in North America and Europe is -0.28 (Böcker and Finger, 2017). Thus, there is -on average -a significant change in pesticide use due to the introduction of a tax to be expected.…”