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Human Capital, Adjustments in Subjective Probabilities, and the Demand for Pest Controls
1985
Pingali, Prabhu L. | Carlson, Gerald A.
In addition to risk aversion, farmer behavior in an uncertain environment is governed by subjective probability estimates of random events. The estimates given here lend support to the idea that human capital development can improve farmers' ability to estimate pest damage probabilities. More accurate assessment of subjective probabilities leads to lower pesticide use and increases the use of labor‐intensive pest controls. The human capital variables with the largest effects are formal schooling and farmer experience, with smaller impacts from field scouting and extension schools.
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