Factors that Determine Aflatoxin Infestation in Ghana: Application of Cragg's Double Hurdle Model

In our application of Cragg's (double hurdle) model, we explicitly address functional form misspecification by first using nonparametric regression to identify the functional relationship between aflatoxin infestation and a vector of agronomic and socioeconomic variables. Based on the established functional forms, we then apply Cragg's model to estimate the determinants of farm-level aflatoxin infestation. As expected, we find that aflatoxin infestation in northern Ghana is determined by pre-production and post-production factors. However, we estimate insignificant effects for farmer characteristics. An assessment of the importance of functional form shows that an inappropriate function can lead to biased estimates of the Cragg model.