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Genetically Modified Crops: Their Market and Welfare Impacts
American Journal of Agricultural Economics
  • Sergio H Lence, Iowa State University
  • Dermot J. Hayes, Iowa State University
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A framework is developed for examining the price and welfare effects of the introduction of genetically modified (GM) crops. In the short run, non-GM grain generally becomes another niche product. However, more profound market effects are observed under some reasonable parameterizations. In the long run, consumer and producer welfare are usually greater after the introduction of GM technology. Nevertheless, in all instances some consumers and some producers lose. When identity preservation is expensive and cost savings are relatively small, both producer and consumer welfare are lower after introducing GM technology. Interestingly, this outcome is obtained even though all agents are individually rational.

this is a working paper of an article from American Journal of Agricultural Economics, 2005, 87(4); 931-950.

Citation Information
Sergio H Lence and Dermot J. Hayes. "Genetically Modified Crops: Their Market and Welfare Impacts" American Journal of Agricultural Economics Vol. 87 Iss. 4 (2005) p. 931 - 950
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