State-Contingent Demand for Herbicide-Tolerance Seed Trait

Suppose a farmer had to apply a herbicide pre-emergence or not at all. The advent of a herbicide-tolerance trait innovation then provides the option to wait for more information before making a state-contingent post-emergence application. This option to wait can increase or decrease average herbicid...

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Bibliographic Details
Main Authors: David A. Hennessy, Alexander E. Saak
Format: Article
Language:English
Published: Western Agricultural Economics Association 2003-04-01
Series:Journal of Agricultural and Resource Economics
Subjects:
Online Access:https://ageconsearch.umn.edu/record/30723
Description
Summary:Suppose a farmer had to apply a herbicide pre-emergence or not at all. The advent of a herbicide-tolerance trait innovation then provides the option to wait for more information before making a state-contingent post-emergence application. This option to wait can increase or decrease average herbicide use. for heterogeneous acre types, trait royalties increase with the level of uncertainty about the extent of weed damage. Royalties are largest when acre infestation susceptibility types are bunched around the type indifferent to applying the herbicide in the absence of the trait. The trait complements (substitutes for) information technologies that facilitate informed post-emergence (pre-emergence) decisions.
ISSN:1068-5502
2327-8285