Title

Genetically Modified Crops: Their Market and Welfare Impacts

Campus Units

Economics

Document Type

Article

Publication Version

Submitted Manuscript

Publication Date

11-2005

Journal or Book Title

American Journal of Agricultural Economics

Volume

87

Issue

4

First Page or Article ID Number

931

Last Page

950

Abstract

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.

Comments

this is a working paper of an article from American Journal of Agricultural Economics, 2005, 87(4); 931-950.