Araya, Mesele (Dr)Yaynie, Yordanos2021-11-262023-11-192021-11-262023-11-192021-06http://etd.aau.edu.et/handle/12345678/28993Maize production is an important economic activity among smallholder farmers in southern Ethiopia, serving as a major source of income and food security. Maize farmers often use pesticides to control pests, but it poses environmental and human health risks. While the productivity of pesticides has been previously studied, most studies treated pesticide as a direct yield enhancing input rather that a damage reducing one. In this study, we analyze the productivity impact of pesticides using a damage control production function. We estimated Cobb-Douglas production functions using Nonlinear Least Square (NLS) and Two Stage Nonlinear Least Square (2SNLS) methods. We use panel datasets collected in 2018 and 2020 in the southern Ethiopia by the Social Sciences and Impact Assessment Unit of the International Centre of Insect Physiology and Ecology (icipe). The results of the NLS regression indicated that pesticides have no significant effect on maize yield. However, when we use the 2SNLS to control for endogeneity of pesticides, the coefficient of pesticides remains positive and statistically significant, indicating that it increases maize yield. The first stage estimated results of the 2SNLS indicates that pesticide use is affected by pesticide prices, contact with extension agents, application of organic fertilizers and the socio-economic characteristics of households. Furthermore, the marginal product of 1 liter of pesticide is found to be 51 kg of maize yield, which indicates that pesticides reduce yield losses due to pests. Calculations of optimal amount of pesticides show that farmers could maximize their profit at an average of 8.4 liters of pesticides. An average quantity above or below this value indicates an overuse or underuse of pesticides. However, this estimate is from the private profit maximizing point of view, but it is important to consider the health and environmental effects of pesticides. To fully understand the societal cost of pesticides, future studies may need to collect data on not only the private benefits, but also the potential costs associated with public health and the environment.enMaize ProductionSouthern EthiopiaThesis