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Planting Decisions and Uncertain Consumer Acceptance of Genetically Modified Crop Varieties


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  • Saak, Alexander
  • Hennessy, David A.


There exists much uncertainty about consumer attitudes toward genetically modified foods. If it happens that sufficient (insufficient) acres are planted under nonmodified seed to meet postharvest demand, then a price premium will not (will) emerge for the nonmodified varieties. A nonlinearity originates in the fact that a price premium may not be supported. This nonlinearity interacts with demand uncertainty to determine equilibrium plantings and the probability that postharvest varietal prices differ. Also, as planting approaches signals will be broadcast about the nature of postharvest demand. We show how the nonlinearity affects the types of signals that growers will prefer to receive.

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Bibliographic Info

Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 5026.

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Date of creation: 01 May 2002
Date of revision:
Publication status: Published in American Journal of Agricultural Economics, May 2002, vol. 84, pp. 308-319
Handle: RePEc:isu:genres:5026

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
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  1. Susan Athey & Jonathan Levin, 1998. "The Value of Information In Monotone Decision Problems," Working papers 98-24, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Lapan, Harvey E & Moschini, Giancarlo, 2000. "Incomplete Adoption of a Superior Innovation," Economica, London School of Economics and Political Science, vol. 67(268), pages 525-42, November.
  3. Fernandez-Cornejo, Jorge & McBride, William D., 2000. "Genetically Engineered Crops For Pest Management In U.S. Agriculture," Agricultural Economics Reports 33931, United States Department of Agriculture, Economic Research Service.
  4. Sergio H. Lence & Dermot J. Hayes, 2001. "Response to an Asymmetric Demand for Attributes: An Application to the Market for Genetically Modified Crops," Center for Agricultural and Rural Development (CARD) Publications 01-mwp5, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  5. Babcock, Bruce A., 1990. "Value of Weather Information in Market Equilibrium (The)," Staff General Research Papers 10592, Iowa State University, Department of Economics.
  6. Milgrom, Paul & Shannon, Chris, 1994. "Monotone Comparative Statics," Econometrica, Econometric Society, vol. 62(1), pages 157-80, January.
  7. Henry, Claude, 1974. "Investment Decisions Under Uncertainty: The "Irreversibility Effect."," American Economic Review, American Economic Association, vol. 64(6), pages 1006-12, December.
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Cited by:
  1. Toolsema, L., 2005. "Competition with mandatory labeling of genetically modified products," Research Report 05F12, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
  2. John C. Bernard & John D. Pesek, Jr. & Chunbo Fan, 2004. "Delaware farmers' adoption of GE soybeans in a time of uncertain U.S. adoption," Agribusiness, John Wiley & Sons, Ltd., vol. 20(1), pages 81-94.
  3. Ambec, Stefan & Langinier, Corinne & Marcoul, Philippe, 2012. "Spatial Efficiency of Genetically Modified and Organic Crops," Working Papers 125232, Structure and Performance of Agriculture and Agri-products Industry (SPAA).
  4. Saak, Alexander E., 2003. "Identity Preservation And False Non-Gmo Labeling In The Food Supply Chain," 2003 Annual meeting, July 27-30, Montreal, Canada 22182, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  5. Durbach, Ian, 2009. "On the estimation of a satisficing model of choice using stochastic multicriteria acceptability analysis," Omega, Elsevier, vol. 37(3), pages 497-509, June.
  6. Ganiere, Pierre & Chern, Wen S. & Hahn, David E., 2004. "Who Are Proponents And Opponents Of Genetically Modified Foods In The United States?," Working Papers 28315, Ohio State University, Department of Agricultural, Environmental and Development Economics.
  7. Ganiere, Pierre & Chern, Wen S., 2004. "Consumer Acceptance Of Genetically Modified Foods: A Profile Of American Consumers," 2004 Annual meeting, August 1-4, Denver, CO 19972, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  8. Toolsema, Linda, 2005. "Competition with mandatory labeling of genetically modified products," Research Report 05C12, University of Groningen, Research Institute SOM (Systems, Organisations and Management).


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