Evaluating health and environmental impacts of pesticide use: Implicationsfor the design of ecolabels and pesticide taxes

This paper estimates the economic impacts of pesticide use on human health and on the environment to gather information on the structure of a possible pesticide tax and on the design of an "environmentally friendly" bread pro duct. The relative importance of these different impacts is determined by w hat individuals are prepared to pay to avoid a case of human ill health and a unit of environmental damage, measured by bird species in decline. Willi ngness to pay is estimated using a contingent ranking approach, a variant o f the standard contingent Valuation method, which is capable of tackling th e multidimensional effects associated with pesticide applications. The resu lts suggest that consumers would be willing to pay substantial price markup s for environmentally friendly bread leaves and, consequently, that a case could be made for a substantial pesticide tax, preferably differentiated by product type. It is also shown that individuals are on average only willing to tolerate between 7-8 cases of human illness to save an entire bird spec ies.