Assessing Economic Implications of New Technology: The Case of Cornstarch-Based Biodegradable Plastic

Keith Coble, Ching-Cheng Chang, Bruce McCarl and Bobby R. Eddleman

Review of Agricultural Economics, 1992, vol. 14, issue 1, 33-43

Abstract: A nonlinear mathematical programming model of the agricultural sector is utilized to examine the potential economic impacts of producing cornstarch-based biodegradable plastics. The model simulates market conditions in terms of prices, quantities, farm program expenditures, and resource usage while also generating social welfare measures. Six alternative biodegradable plastic production and technology scenarios are examined. The results indicate that biodegradable plastics production, even under optimistic scenarios, does not have major impacts on the agricultural sector. Producers gain welfare benefits, largely through corn and sorghum production. Biode-degradable plastics production causes increased farm program expenditures as well. A net welfare cost to the agricultural sector would need to be met by consumer and environmental gains due to biodegradable plastics use.

Date: 1992
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