Under- and over-use of pesticides: An international analysis

This paper analyzes the economic, political and environmental factors that contribute to the consumption and under- or over-use of pesticides. Using unbalanced panel data analysis, we study how pesticide over- or under-use varies for countries with different per capita Gross Domestic Product (GDP) and foreign direct investment (FDI) stock. We begin by controlling for climatic and agricultural variables that should lead to variation in pesticide application rates. The residual from the regression provides an indication of a nation's deviation in pesticide use relative to the mean. The more negative the residual, the more likely it is that that nation is under-using pesticides. The more positive it is, the more likely it is that pesticides are being over-used. We study the correlation of this residual with important economic and political variables. We find that at low levels of per capita GDP, there is evidence of pesticide under-use and that at the highest income levels, there may be increasing over-use. We also look at the correlation of pesticide use with foreign direct investment stock, farm size, mechanization and democracy and, in most cases find significant correlation with these variables. ► We estimate the relationship between pesticide use and macroeconomic variables. ► We use an unbalance panel with data from 94 countries. ► We find that pesticide use tends to increase with GDP, but is constant at middle levels. ► We find an inverted U-shaped relationship between pesticide use and foreign direct investment.