Search

In the continuing debate over the impact of genetically modified (GM) crops on farmers of developing countries, it is important to accurately measure magnitudes such as farm-level yield gains from GM crop adoption. Yet most farm-level studies in the literature do not control for farmer self-selection, a potentially important source of bias in such estimates. We use farm-level panel data from Indian cotton farmers to investigate the yield effect of GM insect-resistant cotton. We explicitly take into account the fact that the choice of crop variety is an endogenous variable which might lead to bias from self-selection. A production function is estimated using a fixed-effects model to control for selection bias. Our results show that efficient farmers adopt Bacillus thuringiensis (Bt) cotton at a higher rate than their less efficient peers. This suggests that cross-sectional estimates of the yield effect of Bt cotton, which do not control for self-selection effects, are likely to be biased upwards. However, after controlling for selection bias, we still find that there is a significant positive yield effect from adoption of Bt cotton that more than offsets the additional cost of Bt seed. [ABSTRACT FROM AUTHOR]

This paper estimates a social discount rate in India for the purpose of economic evaluation of investment projects, such as those aimed at improving the nation's agricultural performance. The component parameters of this rate are: the growth rate of per capita consumption in real terms, the elasticity of the marginal utility of consumption and the mortality-based discount rate. Based upon time series data, the overall figure turns out to be 5.2 percent. This, it is contended, is reasonable and may be used in cost benefit analysis in that country. [ABSTRACT FROM AUTHOR]