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Market and Welfare Effects of Second‐Generation, Consumer‐Oriented GM Products
Author(s) -
Giannakas Konstantinos,
Yiannaka Amalia
Publication year - 2008
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/j.1467-8276.2007.01053.x
Subject(s) - product differentiation , product (mathematics) , economic surplus , consumer welfare , consumer demand , welfare , agriculture , economics , business , genetically modified organism , industrial organization , microeconomics , market economy , ecology , geometry , mathematics , biology , biochemistry , chemistry , gene
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.