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Valuing New Random GM Traits: The Case of Drought Tolerant Wheat

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  • Shakya, Sumadhur
  • Wilson, William W.
  • Dahl, Bruce L.

Abstract

There has been an increase in support for developing genetic modification (GM) technology in wheat. The purpose of this paper was to develop an analytical model to analyze the value of GM traits at different phases of development. To do so we developed a stochastic binomial model of real options. The results indicate that the value of drought tolerant wheat using GM technology is in-the-money at each phase of development. The greatest value would accrue to the Prairie Gateway and northern Great Plains regions in the United States.

Suggested Citation

  • Shakya, Sumadhur & Wilson, William W. & Dahl, Bruce L., 2012. "Valuing New Random GM Traits: The Case of Drought Tolerant Wheat," Agribusiness & Applied Economics Report 128033, North Dakota State University, Department of Agribusiness and Applied Economics.
    • Handle: RePEc:ags:nddaae:128033
    DOI: 10.22004/ag.econ.128033
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    References listed on IDEAS

    as
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    8. William Wilson & Bruce Dahl, 2010. "Competition and Dynamics in Market Structure in Corn and Soybean Seed," Antitrust Chronicle, Competition Policy International, vol. 4.
    9. William W. Wilson & Bruce L. Dahl, 2005. "Costs and Risks of Testing and Segregating Genetically Modified Wheat," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(2), pages 212-228.
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