A Hedonic Price Analysis of Corn and Soybean Herbicides

Herbicides account for approximately 2.2% of total farm expenses and are applied to more than 80% of farmland in the USA. The widespread adoption of herbicides contributed to the increased and relatively cheaper productivity of modern intensively managed agricultural systems in developed countries. The present study uses a hedonic framework to analyze the effect of selected attributes on the price of corn and soybean herbicides. Two different empirical models were estimated separately for the two crops. The data include information on 51 herbicides, 27 for corn and 24 for soybean crops used in Kentucky. Findings indicate that efficacy against weeds and crop response (illustrates the potential of an herbicide to injure a crop) of herbicides are significant determinants of their prices. Moreover, some of the environmental statements have an effect on herbicide prices. The study confirms the importance of explicitly including information about herbicides active ingredients and their impacts on plants' physiological cycle as it improved the model fit for corn herbicides and provided results in line with the a-priori hypothesis