Liapis, Peter S.

Moffitt, L. Joe

English

Research Papers in Economics

SOUTHERN  JOURNAL  OF  AGRICULTURAL  ECONOMICS  JULY,  1986
ECONOMIC  ANALYSIS  OF  COTTON  INTEGRATED  PEST
MANAGEMENT  STRATEGIES:  REPLY
Peter  S.  Liapis and L. Joe  Moffitt
Scott, Cochran, and Nicholson  (SCN)  pres-  of models will continue to be used depending
ent  three  criticisms  of our  analysis  (Liapis  on  researchers'  beliefs  of  which  model  is
and Moffitt)  presented  in the July  1983  edi-  "best" given the problem at hand and binding
tion of the Southern  Journal  of Agricultural  constraints.  For the purpose  of our analysis,
Economics . We  address  each  criticism  in  we regard the EUMGF approach  as attractive
turn.  because  it  is tractable  and theoretically  rea-
First,  SCN  object  to the EUMGF  approach  sonable.
to stochastic  efficiency.  The  main  objection  Second,  SCN  express  concern  about  the
seems to be that this approach runs a higher  data underlying our analysis. All relevant data
risk  than  some  alternative  stochastic  effi-  available were analyzed with the expectation
ciency  criteria  of erroneously  identifying  a  that useful information could be gained. There
useful  technology as  inefficient.  The cost of  was also concern about the data's limitations
such  a  mistake,  referred  to  as Type  I  error,  which is why we included an explicit caution
presumably  accrues  because  a  useful  pro-  to this effect in the paper  (Liapis  and Moffitt,
duction technology is not utilized.  Costs can  p.  100). However, SCN present an interesting
also  be incurred  due  to Type  II  error,  i.e.,  point regarding  "free  riders."  The  commu-
erroneous  use of multiple production  tech-  nity pest  management  strategy  provides  an
nologies when a single technology is actually  incentive for producers to "free ride."  Since
efficient.  With respect to Type  I and Type  II  the total pest population should be reduced
error trade-offs,  it can  be  argued  that when  after  all  community members  institute  con-
comparing  new  technologies,  such  as  bio- comparing  new  technologies,  such  as  bio-  trols,  it  may  pay for  a  grower  not  to apply
logical  control  of agricultural  pests,  to  es-  controls because such actions only affect pest
tablished  techniques,  avoidance  of Type  II  marginally. For the com-
errors-acceptance  of  the  null  hypothesis  management  ste  ef- munity  pest management  strategy  to  be  ef- that  the  expected  utility of one  alternative  theee  meth  s  be  e
is  equal  to  the  expected  utility  of another  fectie  terefore  a meo  mt  e 
alternative  when  it is false-is more  impor-  to assure  compliance.  If enforcement  meth-
tant.  In  such  cases,  the  likelihood  of  the  ods are necessary, control costs may be higher
established  technology being  abandoned  er-  and these costs may not be reflected in chem-
roneously  as  a  result  of  a  single  study  is  ical  and  application  costs.  Of course,  prob-
practically  insignificant.  Much  more  signifi-  les  with  "free  riders"  also  exist with  the
cant  is the likelihood  that development  of a  biological control technology since the wasps
new technology will be challenged if results  are  mobile.  Our  data  did not permit  inves-
do  not appear  promising  even  in  the  short  tigation of the longrun implications of these
run.  effects.  However,  we fail  to see the  connec-
In the  context of our analysis,  minimizing  tion between  "free riders"  and the assertion
Type  II  error  lowers  the  likelihood  that an  by SCN  that the untreated  fields  outside  the
experimental technology,  such as biological  community,  strategy  T4,  is  not  viable.  On
control,  will  be  erroneously  abandoned  at  the  contrary,  the  data  indicate  that  when
the  research  stage.  Until  a  model  selection  Heliothis infestations  are  low,  the  use  of
procedure  is  devised  that  resolves  all  com-  chemical controls may not be warranted.  Un-
putational and theoretical concerns, a variety  der  these  circumstances,  sufficient  control
Peter  S. Liapis  is an  Agricultural  Economist,  International  Economics  Division,  Economic  Research  Service,  U.
S. Department  of Agriculture,  Washington,  D.  C.  and L. Joe Moffitt  is an Agricultural  Economist,  Natural  Resource
Economics Division, Economic Research Service,  U. S. Department of Agriculture, University of California, Riverside.
Coypright  1986,  Southern  Agricultural  Economics Association.
173may be  provided  by natural enemies.  Given  promotional campaign mounted for or against
possible  problems  with  resistance  buildup  particular  strategies.  For  example,  suppose
over time,  this strategy may have some  long-  that actual  risk preferences  of farmers were
run  benefits.  in  the  range  identified  in  Table  1  of Liapis
Third,  SCN claim that our model's predic-  and  Moffitt  such that Trichogramma  releases
tion  is  faulty.  This assertion  is  not only  in-  were the rational Heloithis  management strat-
correct  but  also  revealing  of  a  egy.  In  point of  fact,  we would  not  be  the
misunderstanding  of  the  purpose  of  our  least  bit  surprised  to  learn  that  this  new,
analysis.  Our analysis  determines the rational  biology-based pest control technique had not
choice  among  alternative  pest  management  achieved widespread adoption. In this regard,
strategies  according  to economic  criteria.  It  we note  that the  integrated  control  concept
makes  no  attempt  to  predict  what  actual  and scientific studies documenting  its advan-
choices of farmers will be since actual choices  tages  existed for decades  before  this knowl-
will  depend  to  a  large  extent  on  farmers'  edge had a significant  impact on agricultural
perceptions  which are  in turn related to the  pest  management.
REFERENCES
Liapis,  P.  S.  and  L. J.  Moffitt.  "Economic  Analysis  of  Cotton  Integrated  Pest  Management
Strategies."  So. J.  Agr.  Econ.,  15,1(1983):  97-102.
Scott,  R.  Douglas,  M.  J.  Cochran,  and  W.  F.  Nicholson,  Jr.  "Economic  Analysis  of Cotton
Integrated  Pest  Management  Strategies:  A Comment."  So. J.  Agr.  Econ.,  18,1(1986):
169-71.
174

ECONOMIC ANALYSIS OF COTTON INTEGRATED PEST MANAGEMENT STRATEGIES: REPLY

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