Environmental and Agricultural Policy Effects on Information Acquisition and Input Choice

A dynamic model of the farm is developed to evaluate the effects of agricultural policies, a unit pesticide tax, and an information subsidy on the choice of damage control inputs. Non-chemical damage control inputs are information based and require investment by the farmer in information. The steady state comparative statics show that a pesticide tax can provide an incentive for the adoption of a non-chemical pest control input and that conventional economic intuition about the effects of farm program parameters depends crucially on the returns to scale of the non-chemical kill function and the local stability of the steady state.