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.
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Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2001 Annual meeting, August 5-8, Chicago, IL with number
20476.
Length: Date of creation: 2001 Date of revision: Handle: RePEc:ags:aaea01:20476
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