Location: 368A Heady Hall
Description: Seungki Lee
"Estimating the Value of Innovation and Extension Information: The case of SCN-Resistant Soybean Varieties"
Abstract: This paper presents direct evidence on the impact of a specific extension program, aimed at promoting the adoption of varieties resistant to the soybean cyst nematode (SCN), specifically the Iowa State University SCN-Resistant Soybean Variety Trials (ISU-SCN). We use two data sources: the ISU-SCN data, and a rich proprietary dataset on farmers’ seed purchases. Combining these data, we estimate the value to farmers and seed companies of the availability of SCN-resistant varieties and the associated variety trials that provide information on their performance. Factoring in the scope and diffusion of extension information, we define the region and time for the analysis as Iowa and Illinois, 2011-2016. Farmers’ seed choices are specified in a discrete choice framework, and we employ a one-level nested logit model to estimate seed demand. Using these demand estimates, we find farmers’ willingness-to-pay (WTP) for the SCN-resistant varieties to be 1.66 dollars per acre. Also, the WTP for being tested by ISU-SCN is 1.37 dollars per acre, and when they performed above the median in terms of yield (SCN control), the additional WTP from the performance information is estimated at 1.38 (0.46) dollars per acre. Using counterfactual analyses, over the period and region of analysis, the total surplus associated with the existence of, and information about, SCN resistance trait is estimated to be about 239 million dollars, 60% of which is captured by seed suppliers and 40% is held by farmers.
Contact Person: Otavio Bartalotti