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How do coexistence regulations affect markets and welfare?

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  • Sylvaine Poret

    (ALISS - Alimentation et sciences sociales - INRA - Institut National de la Recherche Agronomique)

Abstract

This paper presents a theoretical economic model assessing the effect of the level of mandatory coexistence regulations on market and welfare outcome. All farmers have the same productivity increase from GMO adoption but they are heterogeneous in the production cost. They also differ with respect to the type of seed they use by the costs of implementing ex ante regulation (if they grow GMOs) or to their probability of having their harvest downgraded (if they produce non-GMOs. Unit profits are linear and crop choices are endogenous. We model a classical vertical differentiation model on the consumer side. We study several forms of regulation: no regulation, only a regulatory maximum threshold for the adventitious presence of GMOs in the non-GMO production, ex ante regulation in addition, and ex ante regulation with ex post liability.

Suggested Citation

  • Sylvaine Poret, 2010. "How do coexistence regulations affect markets and welfare?," Post-Print hal-02818736, HAL.
  • Handle: RePEc:hal:journl:hal-02818736
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