Farmer risk assessment for voluntary insecticide reduction

We develop a theoretical basis for voluntary reduction in insecticide use, and quantify the subjective value farmers place on reducing environmental r isk. The indirect utility model is used to quantify the acceptable financia l cost of eliminating one insecticide application in return for avoidance o f moderate risk to the environment. The mean valuation in Illinois, Iowa, N ebraska and Ohio, USA, is $8.25 per acre. Acceptable yield loss increases w ith importance of environmental goods, with formal education and with farmi ng experience. Valuation increases with total expenditure on insecticides u p to $89 per acre. Decomposition of the Tobit model used in estimation indi cates that voluntary programs should target intensification rather than ext ensification of participation to maximize effectiveness. (C) 1999 Elsevier Science B.V. All rights reserved.