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Abstract

This paper develops an econometric model to analyze the onfarm impact of adoption of genetically engineered (GE) crops on pesticide use and yields after controlling for other factors. The model, which corrects for self-selection and simultaneity and is consistent with profit maximization, is used to estimate the relationship between Bt corn adoption and insecticide use and yields using data from a nationwide farm survey carried out in 2001. Statistically significant econometric results, controlling for other factors, show a moderate insecticide reduction and a small yield increase associated with adoption of Bt corn relative to using conventional corn varieties in 2001.

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