Valuing Product Innovation: Genetically Engineered Varieties in U.S. Corn and Soybeans

53 Pages Posted: 19 Feb 2019 Last revised: 25 Feb 2019

See all articles by Federico Ciliberto

Federico Ciliberto

University of Virginia - Department of Economics; Centre for Economic Policy Research (CEPR)

GianCarlo Moschini

Iowa State University - Department of Economics

Edward Perry

Kansas State University - Department of Agricultural Economics

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Date Written: February 2019

Abstract

We develop a discrete-choice model of differentiated products for U.S. corn and soybean seed demand to study the welfare impact of genetically engineered (GE) crop varieties. Using a unique dataset spanning the period 1996-2011, we find that the welfare impact of the GE innovation is significant. In the last five years of the period analyzed, our preferred counterfactual indicates that total surplus due to GE traits was $5.18 billion per year, with seed manufacturers appropriating 56% of this surplus. The seed industry obtained more surplus from GE corn, whereas farmers received more surplus from GE soybeans.

Suggested Citation

Ciliberto, Federico and Moschini, GianCarlo and Perry, Edward, Valuing Product Innovation: Genetically Engineered Varieties in U.S. Corn and Soybeans (February 2019). CEPR Discussion Paper No. DP13525, Available at SSRN: https://ssrn.com/abstract=3336783

Federico Ciliberto (Contact Author)

University of Virginia - Department of Economics ( email )

P.O. Box 400182
Charlottesville, VA 22904-4182
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

GianCarlo Moschini

Iowa State University - Department of Economics ( email )

260 Heady Hall
Ames, IA 50011
United States

Edward Perry

Kansas State University - Department of Agricultural Economics ( email )

Manhatten, KS 66506-4001
United States

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