Response to an Asymmetric Demand for Attributes: An Application to the Market for Genetically Modified Crops

A framework is developed for examining the price and welfare effects of the introduction of genetically modified (GM) crops. In the short run, non-GM grain generally becomes another niche product. However, more profound market effects are observed under some reasonable parameterizations. In the long run, consumer and producer welfare are usually greater after the introduction of GM technology. Nevertheless, in all instances some consumers and some producers lose. When identity preservation is expensive and cost savings are relatively small, both producer and consumer welfare are lower after introducing GM technology. Interestingly, this outcome is obtained even though all agents are individually rational.


Issue Date:
2001
Publication Type:
Working or Discussion Paper
Record Identifier:
http://ageconsearch.umn.edu/record/18699
PURL Identifier:
http://purl.umn.edu/18699
Total Pages:
32
Series Statement:
MATRIC Working Paper 01-MWP 5




 Record created 2017-04-01, last modified 2018-01-22

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