Production Risk, Farmer Welfare, and Bt Corn in the Philippines
Journal article, Peer reviewed
Published version
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http://hdl.handle.net/11250/2503581Utgivelsesdato
2017-12Metadata
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Originalversjon
Agricultural and Resource Economics Review. 2017, 46 (3), 507-528. 10.1017/age.2017.1Sammendrag
We determine the production risk effects and welfare implications of single-trait Bt corn adoption in the Philippines. We use a stochastic production function estimation approach that allows for examining the skewness effects of Bt within a damage abatement specification. Our results indicate that Bt corn has a statistically significant yield increasing, risk-increasing (i.e., variance-increasing) and downside risk-reducing (i.e., skewness-increasing) effects. Based on risk premium, certainty equivalent, and loss probability welfare measures, Bt corn farmers in the Philippines are better-off (in absolute terms) relative to non-Bt farmers given Bt corn's dominant yield increasing effect and downside risk-reducing effect. Production Risk, Farmer Welfare, and Bt Corn in the Philippines