Revisiting Quality-Adjusted Price and Quantity Indices for Pesticides
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This study extends previous research, which calculated quality-adjusted price and quantity indices for the pesticides applied to corn, soybeans, cotton, and sorghum using hedonic methods (Fernandez-Cornejo and Jans, 1995). We extend the analysis through 2008 and make several econometric improvements. The analysis proceeds as follows: First, Zivot-Andrews tests are used to determine whether there are structural breaks in the data generating process. Next, we use hedonic regressions to control for pesticide quality characteristics including potency, toxicity, and persistence across active ingredients. Finally, the regression results are used to obtain preliminary estimates of the quality-adjusted price and quantity indices.