The Adoption and Diffusion of GM Crops in USA: A Real Option Approach
The paper aims at modelling adoption and diffusion decisions of farmers towards genetically modified crops under a real option framework. Modern GM crops help farmers to resolve two main sources of uncertainty: output uncertainty and input uncertainty. Those crops represent a revolutionary form of farming compared to the technology adoption studied in the literature in the late ‘70s-early ‘80s. The paper develops a theoretical model of adoption and diffusion of new GM crops under uncertainty and irreversibility. We test our theoretical predictions using data from 2000 to 2008 of a panel dataset constructed for 13 states of USA involved into the production of 4 different GM crop. These conclusions may appear to contradict the general perception of a delayed penetration for the GM crops, whose success seems to be retarded by lack of information, mistrust and an exaggerated perception of risks. GM crops tend to be invasive, in that their short term profitability is so high as compared with the investment needed, that once the hump of uncertainty is overcome, they operate a veritable takeover of agriculture
|Date of creation:||20 Jul 2010|
|Date of revision:||20 Jul 2010|
|Contact details of provider:|| Postal: |
Web page: http://www.ceistorvergata.it
More information through EDIRC
|Order Information:|| Postal: CEIS - Centre for Economic and International Studies - Faculty of Economics - University of Rome "Tor Vergata" - Via Columbia, 2 00133 Roma|
Web: http://www.ceistorvergata.it Email:
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Anderson, Jock R. & Feder, Gershon, 2007. "Agricultural Extension," Handbook of Agricultural Economics, Elsevier.
- Kaliba, Aloyce R. & Featherstone, Allen M. & Norman, David W., 1997.
"A stall-feeding management for improved cattle in semiarid central Tanzania: factors influencing adoption,"
Agricultural Economics of Agricultural Economists,
International Association of Agricultural Economists, vol. 17(2-3), December.
- Kaliba, Aloyce R. M. & Featherstone, Allen M. & Norman, David W., 1997. "A stall-feeding management for improved cattle in semiarid central Tanzania: factors influencing adoption," Agricultural Economics, Blackwell, vol. 17(2-3), pages 133-146, December.
- Timothy G. Conley & Christopher R. Udry, 2005.
"Learning about a new technology: pineapple in Ghana,"
Federal Reserve Bank of San Francisco.
- Timothy G. Conley & Christopher R. Udry, 2010. "Learning about a New Technology: Pineapple in Ghana," American Economic Review, American Economic Association, vol. 100(1), pages 35-69, March.
- Timothy G. Conley & Christopher R. Udry, 2000. "Learning About a New Technology: Pineapple in Ghana," Working Papers 817, Economic Growth Center, Yale University, revised May 2004.
- Conley, T.G. & Udry, C.R., 2000. "Learning about a New Technology: Pineapple in Ghana," Papers 817, Yale - Economic Growth Center.
- Feder, Gershon & Savastano, Sara, 2006.
"The role of opinion leaders in the diffusion of new knowledge : the case of integrated pest management,"
Policy Research Working Paper Series
3916, The World Bank.
- Feder, Gershon & Savastano, Sara, 2006. "The role of opinion leaders in the diffusion of new knowledge: The case of integrated pest management," World Development, Elsevier, vol. 34(7), pages 1287-1300, July.
- Feder, Gershon & Just, Richard E & Zilberman, David, 1985. "Adoption of Agricultural Innovations in Developing Countries: A Survey," Economic Development and Cultural Change, University of Chicago Press, vol. 33(2), pages 255-98, January.
- Mark Rosenzweig & Andrew D. Foster, .
"Learning by Doing and Learning from Others: Human Capital and Technical Change in Agriculture,"
_068, University of Pennsylvania.
- Foster, Andrew D & Rosenzweig, Mark R, 1995. "Learning by Doing and Learning from Others: Human Capital and Technical Change in Agriculture," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1176-1209, December.
- Cohen, Wesley M & Klepper, Steven, 1996. "Firm Size and the Nature of Innovation within Industries: The Case of Process and Product R&D," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 232-43, May.
- Reimund, Donn A. & Martin, J. Rod & Moore, Charles V., 1981. "Structural Change in Agriculture: The Experience for Broilers, Fed Cattle, and Processing Vegetables," Technical Bulletins 157701, United States Department of Agriculture, Economic Research Service.
- Feder, Gershon & O'Mara, Gerald T, 1981. "Farm Size and the Diffusion of Green Revolution Technology," Economic Development and Cultural Change, University of Chicago Press, vol. 30(1), pages 59-76, October.
- Just, Richard E & Zilberman, David, 1983. "Stochastic Structure, Farm Size and Technology Adoption in Developing Agriculture," Oxford Economic Papers, Oxford University Press, vol. 35(2), pages 307-28, July.
When requesting a correction, please mention this item's handle: RePEc:rtv:ceisrp:169. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Barbara Piazzi)
If references are entirely missing, you can add them using this form.