ADDITIVE VERSUS PROPORTIONAL PEST DAMAGE FUNCTIONS: WHY ECOLOGY MATTERS

Economic analyses of pests typically assume damage is either additively separable from pest free yield or proportional to it. This paper describes the ecological assumptions required for additive and proportional damage functions to demonstrate that both specifications are reasonable. Ecological research supports a proportional damage function for competitive pests such as weeds, while for insect pests the appropriate damage function depends on the level of pest free yield. Theoretical analysis identifies differences between additive and proportional damage functions in terms of the impact of pest control on output variance and the concavity of output in the pest control input.