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Demand for Innovations
Theory Advances and Applications to the Adoption of Genetically Modified Crops
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Genetically-modified organisms in food production represent a new technology with attributes that are valued differently by producers and consumers. Producers? heterogeneous preferences for specific traits and uncertainty about those traits may significantly affect demand for this new technology and its diffusion in agriculture. Conventional frameworks for understanding technology adoption are poorly suited for modeling demand for new technology in such a setting. This book develops a framework to study innovations in the traits of technologies and applies it to biotech crops. It describes in detail a choice structure of decisions leading to the purchase of specific technologies, accounting for how changes in traits affect adoption. It also accounts for boundedly rational decision makers and uncertain trait levels. This approach enables researchers to estimate a range of values for bundled traits, even in the case when trait distributions are partially observed. The methods described may also be used to distinguish the valuation of traits associated with different region and farmer characteristics and may be particularly useful for economists and business analysts.
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