Department of Agricultural and Resource Economics
School of Public Policy
University of California at Berkeley
EEP 101
ECO 125290
David Zilberman
Fall, 2001
Lecture 13 ENVIRONMENTAL AND HEALTH RISKS OF
PESTICIDES
Topics
Health Risks and Environmental Effects of Pesticide Use
Examples
What Are Pesticides
Their Benefits
What’s Wrong
Pesticide-Use Strategies
Pesticides in Developing Countries
Pesticides Regulations and Policies
Major Issues of Debate
-Should They Be Banned
-International Harmonization of Pesticides
Health Risks and Environmental Effects of Pesticide Use
Health risk is defined as the probability that an individual selected
randomly from a population contracts adverse health effects (mortality or
morbidity) from a substance. We can distinguish between an individual risk
and a group health risk. Risk assessment is a technique to assess health risk
and to form policies.
The health risk-generating process contains several stages. In the case of
pesticides, we consider three stages:
(1) Contamination and movement
(2) Exposure
(3) Dose/response
Contamination is the result of pesticide application. The chemicals are
spread through the air and water and become absorbed by the product.
Exposure may result from many activities:
• Exposure may be from eating, breathing, and touching.
• For food safety, the exposure is to the consumer.
• For worker safety, the exposure is to the applicator, mixer, and
factory worker.
• For ground water, exposure is to whoever drinks and bathes in the
water
• For environmental risk, exposure is to the species that are exposed to
the risk.
The dose-response relationship translates exposure to probability of
contracting certain diseases. We should distinguish between acute and
chronic risks.
• Acute risks are immediate risks of poisoning.
• Chronic risks are risks that may depend on accumulated exposure
and which may take time to manifest themselves, for example,
cancer.
Risk Assessment Models
The processes that determine contamination, exposure, and the
dose/response relationship are often characterized by heterogeneity,
uncertainty, and random phenomena (weather). Thus, contamination,
exposure, and the dose/response relationship often exhibit the characteristics
of random variables. Random variables are variables, which can take on
several values, depending on the outcome of some random process, or
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depending on the outcome of some process which is so complicated that
outcomes appear random. When modeling random variables, we often work
with models that contain probabilities. For example, risk assessment models
estimate health risks associated with pesticide application by making use of
estimated probabilities.
A risk-assessment model:
Let r = represent individual health risk
r  f 3( B 3) f 2( B 2) f 1( B1, X )
where
• X = pollution on site (i.e., the level of pesticide use)
• B1 = damage control activity at the site (i.e., protective clothing; reentry rules)
• B2 = averting behavior of individuals (i.e., washing fruits and
vegetables)
• B3 = the medical control of pollution dosage.
The health risk of an average individual is the product of three functions:
(1) f1(B1, X) is the contamination function. The function relates
contamination of an environmental medium to activities of an
economic agent (i.e., relates pesticide residues on apples to
pesticides applied by the grower).
(2) f2(B2) is the human exposure coefficient, which depends on an
individual’s actions to control exposure (i.e., relates ingested
pesticide residues to the level of rinsing and degree of food
processing an individual engages in).
(3) f3(B3) is the dose-response function which relates health risks to the
level of exposure of a given substance (i.e., relates the proclivity of
contracting cancer to the ingestion of particular levels of a certain
pesticide), based on available medical treatment methods, B3.
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• Dose-response functions are estimated in epidemiological and
toxicological studies of human biology
f2(B2) f1(B1, X) = the overall exposure level of an individual to a toxic
material which is the amount of pesticides left on an apple
times the amount consumed.
Estimating these functions involves much uncertainty:
(1) Scientific knowledge of dose-response relationships of pesticides is
incomplete. Pesticides are consumed in small doses over long
periods of time. Dose-response relationships are estimated in
animal studies, and there is uncertainty to what extent they apply to
humans.
(2) The contamination function depends partly on assimilation of
pollution by natural systems, which can differ regionally (i.e.,
winds distribute residues).
(3) The exposure coefficient depends on the education of populations
(i.e., are consumers aware of pesticide residue-averting techniques,
such as washing?).
Policy Goal: To maximize economic welfare (consumer and producer
surplus from pesticides use)
subject to
Probability of (estimated risks exceeds R) > 
In other words, the objective is to maximize economic welfare subject
to the constraint that the probability of health risk remains below a certain
threshold level, R, an acceptable percent of the time, .
• R = target level of risk
• . = safety level (measures the degree of social risk aversion)
 might represent the degree of confidence we have in our risk
estimate.
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Because of the uncertainty about the risk-generation process, the
decision-maker may limit the risk level while constraining the probability of
error of the risk estimate.
For any target level of risk and any degree of significance, the model
can be solved for the optimal levels of:
• Pesticide use
• Damage control activities
• Averting behavior by consumers
• Preventative medical treatments
General Implications:
• The optimal solution involves some combination of pollution
control, exposure avoidance, and medical treatment.
• The cost of reaching the target risk level increases with the safety
level 
• The shadow price of meeting the risk target depends on the degree of
significance we have to assure that the target is being met.
- The higher the , or the greater the uncertainty we have in our
estimate of risk, the higher the shadow value of meeting the
constraint.
Examples
Say there is no uncertainty regarding the health effects of pesticide
use; that is, toxicologists know with certainty a point estimate of the doseresponse function.
Let:
X
A
P
Y
=
=
=
=
level of pesticides used on a field
level of alternate pest control activities
value of farm output (i.e., the price of a basket of produce)
level of farm output
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W = price of pesticide
V = price of alternative controls (V > W)
r = level of health risk in society
B1 = damage control activities by the farm (i.e., pesticide reentry
rules)
B2 = aversion activities by members of the population (i.e., washing
residues off)
B3 = available level of medical treatment
Y = f(X, A) = farm production function (i.e., a pesticide damage function)
r  f 3( B 3) f 2( B 2) f 1( B1, X ) is the health risk of pesticide use.
The objective of the society is:
Pf (X,A)  C(r)  C(B1,B 2,B 3)  WX  VA
Max
X,A,r,B1,B 2,B 3
subject to: . r  f 3(B 3) f 2(B 2) f 1(B1, X)
,
Below I present a formal mathematical solution that can be skipped.
Mathematical Solution
The optimization problem can be written in Lagrangian form as:
Max

X , A,r , B1, B 2 , B 3

 Pf ( X , A)  C(r )  C( B1, B2, B3)  WX  VA  r  f 3( B3) f 2( B2) f 1( B1, X )
with the FOCs:
(1)
d
 PfA  V  0 ,
dA
the MRP of the alternative control equals the MC of the alternative
control
(2)
d
 C ' (r )    0 ,
dr
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the MSC of health risk = the shadow value of risk (the MC of risk in
terms of social damages is equal to the shadow price of reducing
societal risk).
(3)
d
df 1 

 PfX  W    f 3 f 2
0
dX
dX 

(4)
d
df 1 

  CB 1    f 3 f 2
0
dB1
dB1 

(5)
d
df 2 

 CB 2    f 3 f 1
0
dB 2
dB 2 

(6)
d
df 3 

 CB 3    f 2 f 1
 0.
dB 3
dB 3 

We can rewrite equations (3) - (6) using equation (2) as:
df 1 

PfX  W  C ' (r )  f 3 f 2
dX 

The MRP of pesticides to the farm is equal to the MPC of pesticides
plus the (MC of risk) (marginal contribution of pesticides to health
risk)
df 1 

CB1   C ' (r )  f 3 f 2
 0.
dB1 

The MC of damage control equals (avoided MC of risk)(marginal
improvement in risk from engaging in damage control activities)
df 2 

CB 2  C ' (r )  f 3 f 1
 0.
dB 2 

The MC of averting behavior equals (avoided MC of risk)(marginal
improvement in risk from engaging in averting behavior)
df 3 

CB 3  C ' (r )  f 2 f 1
 0.
dB 3 

The MC of medical treatment equals (avoided MC of risk)(marginal
improvement in risk from engaging in medical treatment).
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The optimal solution involves equating all (6) FOCs. Equations (2)-(6) can
be expressed as:
  C' (r ) 
PfX
 CB1
 CB 2
 CB 3
,



df 1  
df 1  
df 2  
df 3 

 f 3f 2
  f 3f 2
  f 3f 1
  f 2f1


dX  
dB1  
dB 2  
dB 3 
which says that the optimal solution involves equating the shadow price of
risk with
MRPpesticides
 MCdamage control
 MCaverting behavior
 MCmedical treatment



  health risk    health risk from    health risk from    health risk from 

 
 
 

 from  pesticides   damage control   averting behavior   medical treatment 
.
The denominator of each expression transforms MB and MC of healthrelated activities into change in health risk.
When parameters are known, the model can be solved for the optimal levels.
One technical implication of the model is that, if there is no tax on pesticide
use, t* =  and no subsidy on farm-level damage control, s* = , then the
farm will not recognize the effect of pesticide use on societal health and
operate as if = 0.
• An inefficiently high level of pesticides will be used
• An inefficiently low level of damage control will be applied.
Implications of the Model
The optimal solution will determine pesticide tax or optimal level of
pesticide to be applied, level of pesticide removal, medical treatment in case
of poisoning, and the resulting level of output and produce price. The result
depends on the risk target; a higher risk target results in higher taxes and
reduced pesticide levels. In some cases, the optimal solution may involve
little restriction of pesticide use but emphasis on residue removal activities.
Example 2 (a model with uncertainty):
Let r be the probability of an individual contracting a disease.
r  ce d  x
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c =
e =
d =
x=
Let:
contamination probability
exposure probability
dose/response probability
amount of pesticides applied.
c
1 with probability 1/ 2
2 with probability 1/2
e
1 with probability 1/ 2
3 with probability 1/2
10 5 with probability 1/ 2
.
d  6
10 with probability 1/2
For x = 1,
 10 6

6
2 10
3 10 6

6 10 6
r  
5
110
2 10 5

5
3 10

6 10 5
with probability
with probability
with probability
1/ 8
1/ 8
1/ 8
with probability
1/ 8
with probability
1/ 8
with probability
1/ 8
with probability
1/ 8
with probability
1/ 8
Note: 10-6 means "one person per million people" contracts the disease.
10-5 means "one person per hundred thousand people" contracts the disease.
13.2
10 5  1.6510 5 , or, one person in
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165,000, on average contracts the disease. Yet the variability of this
estimate is substantial, which implies that  is large.
Then, expected risk is
In many cases, the highest value (worst case estimator) of each
probability is used when the risk generation processes are broken down to
many sub-processes. This creates a "creeping safety" problem, in that the
multiplication of many “worst case” estimates may lead to wildly unrealistic
risk estimates. Of course, the variability and uncertainty associated with risk
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estimates can be reduced by expenditures on research and through
information sharing.
What Are Pesticides
Pesticides include chemicals and other means to reduce or eliminate
pests affecting agricultural production. Humans use animals (cats, dogs,
etc.), mechanical efforts, and chemicals (arsenic) to control pests. In recent
years, the most popular means of pest control are synthetic chemicals. They
include several categories:
Herbicides
The use of herbicides in developed countries increased from 1965 to
1980, and growth in the relative price of labor increased the use of herbicide
as a factor of production. This occurred because herbicide is a substitute for
labor. During the 1980s, lower agricultural commodity prices and reduced
crop acreage led to a reduction in herbicide use.
Insecticides
In the United States, the use of insecticides increased drastically after
World War II. During the 1970s, the establishment of the EPA and an
increase in energy prices led to a reduction in insecticide use. Insecticide
use has grown in developing countries, and it is a major source of
environmental constraint.
Fungicides
Fungicide use has remained relatively stable over the past 30 years in the
United States, although recent legislation banning the use of carcinogenic
chemicals in the Delaney Clause will soon outlaw many fungicides (and
several popular insecticides and herbicides).
Fungicides may be very beneficial to developing countries with humid
climate, and its use has increased.
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Their Benefits
 Chemical pesticides are damage-control agents that may increase yield
and enable production in various regions. They serve as a substitute to
labor and plowing. In addition to saving cost and increasing yield, they
reduce efforts and, thus, improve health and also have several beneficiary
environmental side effects
 Higher yield leads to reduced acreage in agricultural production and thus
saves wildland and forests.
 Pesticides increase supply, increase availability of food, and reduce its
price. This is especially beneficial to poor people who spend a high
percentage of their income on food. Pesticides also enable the production
of fruits and vegetables in many regions and, thus, improve people’s diet
and health.
 Herbicides reduce the use of plowing and prevent problems of soil
erosion.
What’s Wrong
Pesticide use may cause three types of problems:
Food Safety
Human health may be damaged due to both acute and chronic risks.
In some cases, residues can be reduced by washing food and by appropriate
treatment. However, in many cases consumers may be exposed to risk
without their knowledge. Children may be more vulnerable to pesticide
residues. Overall, food safety problems have not been documented as very
severe.
Worker Safety
Applicants and other farm workers are exposed to large volumes of
chemicals and are most vulnerable to pest damage. There have been several
severe cases of worker exposure to chemicals and chemical poisoning.
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Wearing protective clothing, restricting entry to sprayed areas, etc., can
reduce risk.
Environmental Health Problems
Chemical pesticides contaminate ground water and may cause damage
to beneficial species, birds, fish, insects, etc.
In addition to these basic problems, excessive use of pesticides leads
to problems of resistance buildup among species, which may reduce
effectiveness of pesticides over time.
Pesticide-Use Strategies
Population Threshold
It is not economical to spray every time a pest is observed. There are
significant fixed costs of application, and only when population exceeds a
threshold is application justified.
Precision Application
Many of the environmental problems from pesticide use are caused
from using application strategies that are precise. For example, aerial
spraying is cheap but causes pollution. It can be reduced by technologies
that target problem areas.
Biological Control
Use of live organisms as predators of pests was successful in saving
cassava in Africa, and it had several successful applications in developing
countries. However, it may cause environmental problems, e.g., the rabbits
in Australia and the mongoose in Hawaii.
Integrated Pest Management
This is an approach that diversifies the techniques used to control
pesticides, and it emphasizes monitoring, precision technology, crop
rotation, and biological solutions to address pest problems. Chemicals are
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used as a last-resort approach, and the emphasis is on environmentally
benign chemicals.
Biological and Economic Considerations of Pest Control
In many cases pesticide applications may harm beneficial organisms
that serve as predators of species that have the potential to be pests. Thus,
spraying, which destroys beneficial organisms, may trigger new problems.
Economic considerations of pesticide applications should take into
account the cost of application in terms of resistance buildup, damage to
secondary species, and environmental side effects. Individual farmers may
not have the incentive or knowledge to consider all factors and, therefore,
may tend to overspray. In some cases farmers underspray because a
collective, intensive effort can eliminate the pest problem.
Regional Cooperation
Many pest problems, for example, resistance, control of secondary
pests, eradication attempts, and protection against exotic pests, require
collective action. In many cases governments and farmers establish regional
cooperation to address these pest problems.
Biotechnology
Genetically-modified varieties are introduced as pest control agents.
Although they are easy to use and relatively cheap, they have their problems.
Pesticides in Developing Countries
Developing countries have humid conditions and a significant number
of pests. Pests survive better in warm weather, and the potential benefits and
needs of pest control in many developing countries is substantial. Yet, most
pesticides have been produced in developed countries, and many important
pest problems in developing countries do not have appropriate solutions.
Pesticides may be expensive and require purchase of expensive
equipment and, therefore, have not been adopted by the poor in many
developing countries.
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Pesticide use is knowledge intensive. There is evidence that in many
developing countries there is over-application of pesticides. In many cases
lack of knowledge and greedy salesmen can lead to overuse and also
increase the environmental damage.
Poisoning because of exposure to chemicals has been a significant problem.
A classic example is Bhopal in India. Farmers may use chemical containers
for drinking and food preparation because they are available and are cheap.
Biotechnology solutions have not been available for many problems in
developing countries. Yet, China, Argentina, Brazil, and India are
increasingly using Bt cotton and other GMOs. The FAO is working on
developing varieties for the developing world. Farmers in developing
countries may adopt these varieties because of their ease of applications
relative to alternative pesticides.
Pesticides Regulations and Policies
Traditional policies include:
(1) Registration requirements. This involves substantial testing of new
chemicals to assure that they are effective and do not cause
environmental and health effects. Pesticides are registered for a
particular use and, in many cases, farmers may not be able to use the
chemical because it has not been registered for a certain use. The
registration process is costly and gives an advantage to multinationals
over new entrants.
(2) Bans. When a chemical is found to cause significant environmental and
health effects, its use are banned. However, banning is not that simple.
It may be a gradual process and be dependent on availability of
substitutes. In many cases, for example, with methyl bromide, the use
of problematic chemicals continues because of lack of substitutes.
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Alternative Policies
 One alternative policy considered is taxation. However, it is problematic
because of the low elasticity of demand of pesticides and the differences
and social cost of pesticides across locations.
 Alternatively, policymakers may consider limiting the level of pesticides
and introducing transferable permits.
 Another mechanism is the use of partial bans. Chemicals are not allowed
in locations where they cause the most damage. Here the problem is
monitoring.
 Alternatives to pesticides can be subsidized.
 Consumers can be educated about pesticide problems, and green markets
can be promoted.
 The side effects of pesticides can be addressed by protective clothing,
regulation of application procedures, labeling, etc.
Major Issues of Debate
Should They Be Banned?
This has been a major policy debate. The argument for banning is that
it will introduce new and greener technologies and improve environmental
quality. Banning may also lead to a new organic, environmentally friendly
agriculture.
The argument against banning is that it is costly, it expands
agricultural production and makes the environment vulnerable, and it results
in less food and nutrition for the poor. There are alternatives to banning that
include taxation, partial banning, etc.
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International Harmonization of Pesticides
One of the major pesticide policy problems is whether or not to have a
uniform regulation across nations.
This will improve environmental quality and may reduce the use of
toxic chemicals in developing countries. However, it will increase the cost
of production and competitiveness of developing countries. It will also force
them to switch from producing older chemicals at home to purchasing
cheap, modern chemicals that are produced under a monopoly by
multinationals.
What is more reasonable is to regulate chemical residues to allow restriction
of residues because what matters is not how you do it, but the final result.
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