Yes, in your backyard: Forced technological adoption and spatial externalities

Résumé

I study a phenomenon of hastened technology adoption facilitated by a negative spatial externality. GMO seeds have been engineered to withstand the application of particular weedkillers: farmers can use them in-crop, killing the weeds, leaving the crop unscathed. I show that the adoption of such seeds generates negative externalities on downwind neighbors, increasing the probability of the adoption of the same seed by 29% as well as a conversion of cropland to different crops able to withstand the weedkiller. Overall yields remained unchanged as the benefits of the weedkiller on yields are offset by the negative effects of crop failures for neighbors. Consequences of such rapid adoption include possible monopolization on the seed market.

Mots-clés

Technology adoption; spatial externalities; land use, pesticides;

Codes JEL

Q5: Environmental Economics
Q15: Land Ownership and Tenure • Land Reform • Land Use • Irrigation • Agriculture and Environment
Q16: R&D • Agricultural Technology • Biofuels • Agricultural Extension Services
O33: Technological Change: Choices and Consequences • Diffusion Processes