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Modelling heterogeneity to estimate the ex ante value of biotechnology innovations

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  • Dillen, Koen
  • Demont, Matty
  • Tollens, Eric

Abstract

After more than a decade of GM crops, literature reports farmers and consumers can gain significantly from the technology, despite the intellectual property rights assigned to the innovator. In this paper we assess the effect of heterogeneity on this distribution of benefits. A two dimensional framework is created to assess the ex ante benefits of an innovation. Given this setting and the scarce data often available, a parametric modelling approach is taken. The two dimensions of heterogeneity, spatial and temporal, are explicitly modelled as they have a different importance for different technologies. Using this framework we can simulate different corporate pricing strategies and evaluate the benefits generated under changing heterogeneity. The framework is tested on the introduction of HT sugar beet in the EU-27.

Suggested Citation

  • Dillen, Koen & Demont, Matty & Tollens, Eric, 2008. "Modelling heterogeneity to estimate the ex ante value of biotechnology innovations," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43945, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaae08:43945
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    References listed on IDEAS

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    3. Giancarlo Moschini & Harvey Lapan & Andrei Sobolevsky, 2000. "Roundup ready® soybeans and welfare effects in the soybean complex," Agribusiness, John Wiley & Sons, Ltd., vol. 16(1), pages 33-55.
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    5. Matty Demont & Koen Dillen & Erik Mathijs & Eric Tollens, 2007. "GM Crops in Europe: How Much Value and for Whom?," EuroChoices, The Agricultural Economics Society, vol. 6(3), pages 46-53, December.
    6. 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.
    7. Alston, Julian M. & Hyde, Jeffrey & Marra, Michele C. & Mitchell, Paul D., 2003. "An Ex Ante Analysis of the Benefits from the Adoption of Corn Rootworm Resistant, Transgenic Corn Technology," 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia 57828, Australian Agricultural and Resource Economics Society.
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    Cited by:

    1. Kotu, Bekele & Admassie, Assefa, 2015. "Potential impact of improved varieties on poverty reduction: a case study of selected cereal crops in two districts of Ethiopia," 2015 Conference, August 9-14, 2015, Milan, Italy 212013, International Association of Agricultural Economists.
    2. Demont, Matty & Dillen, Koen & Daems, Wim & Sausse, Christophe & Tollens, Eric & Mathijs, Erik, 2009. "On the proportionality of EU spatial ex ante coexistence regulations," Food Policy, Elsevier, vol. 34(6), pages 508-518, December.

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    Keywords

    Heterogeneity; Parametric modelling; ex ante; Research and Development/Tech Change/Emerging Technologies;

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