Planting Decisions and Uncertain Consumer Acceptance of Genetically Modified Crop Varieties

Posted: 1 Jun 2002

See all articles by Alexander E. Saak

Alexander E. Saak

CGIAR - Markets, Trade, and Institutions Division; Kansas State University - Department of Agricultural Economics

David A. Hennessy

Iowa State University - Department of Economics

Abstract

There exists much uncertainty about consumer attitudes toward genetically modified foods. If it happens that sufficient (insufficient) acres are planted under nonmodified seed to meet postharvest demand, then a price premium will not (will) emerge for the nonmodified varieties. A nonlinearity originates in the fact that a price premium may not be supported. This nonlinearity interacts with demand uncertainty to determine equilibrium plantings and the probability that postharvest varietal prices differ. Also, as planting approaches signals will be broadcast about the nature of postharvest demand. We show how the nonlinearity affects the types of signals that growers will prefer to receive.

Suggested Citation

Saak, Alexander E. and Hennessy, David A., Planting Decisions and Uncertain Consumer Acceptance of Genetically Modified Crop Varieties. Available at SSRN: https://ssrn.com/abstract=312039

Alexander E. Saak (Contact Author)

CGIAR - Markets, Trade, and Institutions Division ( email )

United States

Kansas State University - Department of Agricultural Economics

Manhatten, KS 66506-4001
United States
(785) 532-3334 (Phone)

David A. Hennessy

Iowa State University - Department of Economics ( email )

260 Heady Hall
Ames, IA 50011
United States
515-294-6171 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
535
PlumX Metrics