Competition and Differentiation of Pesticides: An Empirical Analysis of French Data

Following the Grenelle de l'Environnement the French government takes the commitment to reduce by 50% pesticide use while maintaining current production levels. How can we reach this objective? Is this target sustainable ? This thesis analyses the demand of farmers and its interaction with firms supply. A desagregated dataset is constructed to analyze the determinants of farmers' practices related to the characteristics of products and firms that market them. The first chapter estimates a demand system assuming homogeneous products within categories of pesticides. It confirms that the demand is not sensitive to the prices at an aggregated level. It shows that only a very high ad valorem tax would achieve the objective of the Grenelle de l'Environnement. However, this measure wouldb significantly reduce farmers' income. Alternatively, the thesis retains simultaneous action on both the supply and the demand. First, a price index is constructed in the second chapter. It introduces the technical and regulatory specificities of these products by exploiting the panel structure of the price series. Second, the adjusted price computed index is used in the third chapter which retains structural econometrics framework to analyze the market equilibrium. Taking into account the structure of competition we compute the margins of firms which are generated by different competition conduct. These results are used to evaluate the effect of the modification of the homologation process on margins. We find that important source of margin was generated by this regulation which sustain innovation.