Market and Welfare Effects of Second-Generation, Consumer-Oriented GM Products |
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| Authors: | Konstantinos Giannakas and Amalia Yiannaka |
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| Institution: | Konstantinos Giannakas is professor and Amalia Yiannaka is assistant professor in the Department of Agricultural Economics at the University of Nebraska-Lincoln. Senior authorship is shared. The authors wish to thank the editor Ian Sheldon and three anonymous reviewers for helpful comments on previous versions. Any remaining errors are the authors'. |
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| Abstract: | We examine the economic effects of the introduction of consumer-oriented genetically modified (GM) products into the food system by developing a model of heterogeneous consumers and producers that allows for vertical and horizontal differentiation between the products available to consumers. The model facilitates the estimation of consumer and producer surpluses in the product/utility and product/net returns spaces. Results show that the introduction of consumer-oriented GM products can change the relationship between GM and conventional and organic products from one of vertical to one of horizontal product differentiation and can enhance both economic welfare and the market acceptance and growth of agricultural biotechnology. |
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| Keywords: | agricultural biotechnology genetically modified products labeling organic agriculture vertical and horizontal product differentiation |
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