Unbalanced Nested Component Error Model and the Value of Soil Insecticide and Bt Corn for Controlling Western Corn Rootworm

We describe four recently developed panel data estimators for unbalanced and nested data, a common problem for economic and experimental data. We estimate a western corn rootworm damage function with each estimator, including separate parameters for random effects from year, location, and experimental errors. We then use each estimator to assess the cost of the western corn rootworm soybean variant and the net benefit of soil insecticide and Bt corn for controlling this pest. At current prices, we find that soil insecticide generates a net loss ranging about $0.50-$3.25/ac, while Bt corn generates a net benefit ranging $2.50-$7.00/ac.