WHAT IS THE VALUE OF BT CORN?

Terrance Hurley, Paul Mitchell () and Marlin E. Rice

No 20476, 2001 Annual meeting, August 5-8, Chicago, IL from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: A common perception is that the value of Bt corn arises from two components-Bt corn increases expected profit and reduces profit variability. This perception encourages farmers and the policy makers to add a risk benefit to estimates of the value of Bt corn to account for the variability reduction. However, a conceptual model generates a useful decomposition of the value of Bt corn and a condition determining the impact of Bt corn on profit variability. An empirical model finds that Bt corn increases profit variability and thus decreases the value of Bt corn by 10-25% depending on risk preferences.

Keywords: Crop; Production/Industries (search for similar items in EconPapers)
Pages: 34
Date: 2001
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea01:20476

DOI: 10.22004/ag.econ.20476

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