Abstract
A conceptual model is developed to evaluate the effect of Bt corn on risk. Results highlight the importance of distinguishing between marginal and aggregate risk effects and demonstrate that the effect of Bt corn on risk depends crucially on the price paid for the technology. Empirical results show that, depending on the price, Bt corn can be marginally risk increasing or decreasing and can either increase or decrease corn acreage. Also, depending on the price, Bt corn can provide a risk benefit to farmers, even when Bt corn is risk increasing.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 345-358 |
| Number of pages | 14 |
| Journal | American Journal of Agricultural Economics |
| Volume | 86 |
| Issue number | 2 |
| DOIs | |
| State | Published - May 2004 |
Keywords
- Endogenous risk
- European corn borer
- Hierarchical model
- Risk premium