Quality-Adjusted Price and Quantity Indices for Pesticides

Quality-adjusted price indices are calculated for pesticides used on major crops in U.S. agriculture for 1967–92 using hedonic methods. Pesticide potency, hazardous characteristics, and persistence in the environment are used as quality characteristics. Separate hedonic functions are estimated for pesticides by end-use (crop) and major pesticide class. Price indices are aggregated using chained Tornqvist indices. Adjusted quantity indices are computed using pesticide expenditures. The adjusted price index rose steadily, reaching in 1992 around 2.5 times the level of 1968. Pesticide use at constant quality peaked in 1981 at a level substantially higher than the peak reached by the unadjusted index.