Working Paper: CEPR ID: DP13525
Authors: Federico Ciliberto; Giancarlo Moschini; Edward Perry
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.
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JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| GE traits (L94) | total surplus (D46) |
| GE traits (D58) | seed industry revenues (Q19) |
| GE traits (L94) | seed revenue (L26) |
| GE traits (D58) | farmers' expected profits (Q12) |
| WTP for GE traits (Q16) | total surplus (D46) |