ESTIMATION OF EFFECTS OF GENETICALLY MODIFIED ORGANISMS

Gökhan Özertan (Boğaziçi University)
H. Alan Love (Texas A&M University)

In this paper we analyze whether biotechnology products are input saving, or not, as claimed. We first develop a basic theoretical model that classifies farmers as users of traditional or GM seed in an intertemporal setting. This model is econometrically estimated for cotton for the U.S. with an ordered probit regression using a USDA-ARMS dataset for 1998 and 1999. Standard errors and t-ratios are calculated using the delete-a-group-jackknife method. Estimation results provide insight into factors affecting farmers' decision to adopt biotechnology. Empirical evidence suggests a negative relationship between GM seed use and herbicide applications, which is the input-saving effect highly advertised by biotechnology companies.