Estimating the demand for a new technology: Bt cotton and insecticide policies

Citation
Bj. Hubbell et al., Estimating the demand for a new technology: Bt cotton and insecticide policies, AM J AGR EC, 82(1), 2000, pp. 118-132
Citations number
18
Categorie Soggetti
Agriculture/Agronomy,Economics
Journal title
AMERICAN JOURNAL OF AGRICULTURAL ECONOMICS
ISSN journal
00029092 → ACNP
Volume
82
Issue
1
Year of publication
2000
Pages
118 - 132
Database
ISI
SICI code
0002-9092(200002)82:1<118:ETDFAN>2.0.ZU;2-E
Abstract
This article examines the potential demand for Bt cotton in the Southeast f rom information gathered in the first year of commercialization. We combine revealed preference (RP) data on adoption of Bt cotton varieties with stat ed preference (SP) data on willingness to adopt to estimate demand using a double-bounded maximum likelihood procedure. Using estimated demand equatio ns, we simulate the costs of reducing conventional insecticide applications through subsidization of Bt cotton Results indicate that reducing cotton i nsecticide applications by 40% in die Southeast would require a $21/acre su bsidy, with total annual program costs between $53 million and $60 million.