The indirect action of damage control inputs means the marginal produc
tivity of these inputs depends on their effectiveness in controlling t
he level and size of production loss caused by the damage agent. Incre
asing returns to damage control inputs can occur even when control and
damage functions are concave. The result implies more attention needs
to be paid to the functional form selection for damage and control fu
nctions in empirical work on pest control and other types of damage co
ntrol inputs. In addition, the possibility of increasing returns may u
ndermine the general use of taxes to reduce pesticide use.