Hennessy, David A.

American Journal of Agricultural Economics Vol. 79 no. 3 (August 1997): 786-791.

Recently, researchers have been paying attention to the possibility of increasing returns to the use of damage control inputs under very plausible technologies. By looking at the mathematical structure of damage and control functions, a necessary and sufficient condition on these functions for locally increasing returns to occur can be described. Using examples, the author demonstrates how the result can be applied to models with single or multiple control inputs. Because analytic solutions are sometimes not possible, a simple empirical test for concavity violations is also provided. A caution is given about problems associated with estimating the basic model specification.