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

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.