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Planting Decisions and Uncertain Consumer Acceptance of Genetically Modified Crop Varieties

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  • Alexander E. Saak
  • David A. Hennessy

Abstract

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. Copyright 2002, Oxford University Press.

Suggested Citation

  • Alexander E. Saak & David A. Hennessy, 2002. "Planting Decisions and Uncertain Consumer Acceptance of Genetically Modified Crop Varieties," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(2), pages 308-319.
  • Handle: RePEc:oup:ajagec:v:84:y:2002:i:2:p:308-319
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    File URL: http://hdl.handle.net/10.1111/1467-8276.00299
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    References listed on IDEAS

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    1. Lapan, Harvey E & Moschini, Giancarlo, 2000. "Incomplete Adoption of a Superior Innovation," Economica, London School of Economics and Political Science, vol. 67(268), pages 525-542, November.
    2. Lence, Sergio H. & Hayes, Dermot J., 2001. "Response to an Asymmetric Demand for Attributes: An Application to the Market for Genetically Modified Crops," Staff General Research Papers Archive 11397, Iowa State University, Department of Economics.
    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. 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.
    5. Milgrom, Paul & Shannon, Chris, 1994. "Monotone Comparative Statics," Econometrica, Econometric Society, vol. 62(1), pages 157-180, January.
    6. Henry, Claude, 1974. "Investment Decisions Under Uncertainty: The "Irreversibility Effect."," American Economic Review, American Economic Association, vol. 64(6), pages 1006-1012, December.
    7. Babcock, Bruce A., 1990. "Value of Weather Information in Market Equilibrium (The)," Staff General Research Papers Archive 10592, Iowa State University, Department of Economics.
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    Cited by:

    1. 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.
    2. 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).
    3. repec:dgr:rugsom:05f12 is not listed on IDEAS
    4. Toolsema, L., 2005. "Competition with mandatory labeling of genetically modified products," Research Report 05F12, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    5. Ambec, Stefan & Langinier, Corinne & Marcoul, Philippe, 2011. "Spatial Efficiency of Genetically Modified and Organic Crops," LERNA Working Papers 11.18.352, LERNA, University of Toulouse.
    6. 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).
    7. Toolsema, Linda, 2005. "Competition with mandatory labeling of genetically modified products," Research Report 05C12, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    8. 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.
    9. repec:gam:jsusta:v:9:y:2017:i:6:p:916-:d:100057 is not listed on IDEAS
    10. 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.

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