Estimating the Demand for a New Technology: Bt Cotton and Insecticide Policies

15 Pages Posted: 24 Mar 2020

See all articles by Bryan J. Hubbell

Bryan J. Hubbell

U.S. EPA

Michele C. Marra

North Carolina State University

Gerald A. Carlson

North Carolina State University - College of Agriculture and Life Sciences

Multiple version iconThere are 2 versions of this paper

Date Written: February 2000

Abstract

This article examines the potential demand for Bt cotton in the Southeast from information gathered in the first year of commercialization. We combine revealed preference (RP) data on adoption of Bt cotton varieties with stated preference (SP) data on willingness to adopt to estimate demand using a double‐bounded maximum likelihood procedure. Using estimated demand equations, we simulate the costs of reducing conventional insecticide applications through subsidization of Bt cotton. Results indicate that reducing cotton insecticide applications by 40% in the Southeast would require a $@@‐@@21/acre subsidy, with total annual program costs between $@@‐@@53 million and $@@‐@@60 million.

Keywords: Bt cotton, biotechnology, demand, insecticide policy, revealed preferences, stated preferences, technology adoption, Q160

Suggested Citation

Hubbell, Bryan J. and Marra, Michele C. and Carlson, Gerald A., Estimating the Demand for a New Technology: Bt Cotton and Insecticide Policies (February 2000). American Journal of Agricultural Economics, Vol. 82, Issue 1, pp. 118-132, 2000, Available at SSRN: https://ssrn.com/abstract=3557427 or http://dx.doi.org/10.1111/0002-9092.00010

Bryan J. Hubbell (Contact Author)

U.S. EPA ( email )

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Michele C. Marra

North Carolina State University

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Gerald A. Carlson

North Carolina State University - College of Agriculture and Life Sciences ( email )

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