Surplus Distribution from the Introduction of a Biotechnology Innovation

Posted: 25 Jul 2000

See all articles by José Benjamin Falck-Zepeda

José Benjamin Falck-Zepeda

CGIAR - International Service for National Agricultural Research (ISNAR)

Greg Traxler

Auburn University - Department of Agricultural Economics and Rural Sociology

Robert G. Nelson

Auburn University - Department of Agricultural Economics and Rural Sociology

Abstract

We examine the distribution of welfare from the introduction of Bt cotton in the United States in 1996. The welfare framework explicitly recognizes that research protected by intellectual property rights generates monopoly profits, and makes it possible to partition these rents among consumers, farmers, and the innovating input firms. We calculate a total increase in world surplus of $240.3 million for 1996. Of this total, the largest share (59%) went to U.S. farmers. The gene developer, Monsanto, received the next largest share (21%), followed by U.S. consumers (9%), the rest of the world (6%), and the germplasm supplier, Delta and Pine Land Company (5%).

JEL Classification: Q18

Suggested Citation

Falck-Zepeda, José Benjamin and Traxler, Gregory J. and Nelson, Robert G., Surplus Distribution from the Introduction of a Biotechnology Innovation. Available at SSRN: https://ssrn.com/abstract=231479

José Benjamin Falck-Zepeda (Contact Author)

CGIAR - International Service for National Agricultural Research (ISNAR) ( email )

Gregory J. Traxler

Auburn University - Department of Agricultural Economics and Rural Sociology ( email )

Comer Hall
Auburn, AL 36849
United States

Robert G. Nelson

Auburn University - Department of Agricultural Economics and Rural Sociology

Comer Hall
Auburn, AL 36849
United States

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