Forthcoming : New plant engineering techniques, R&D investment and international trade
Journal article: New plant engineering techniques (NPETs) may significantly improve both production and quality of foods. Some consumers and regulators around the world might be reluctant to accept such products and the global market penetration of these products may remain low. We develop a parsimonious economic model for R&D investment in food innovations to identify conditions under which NPET technology emerges in the context of international trade. The framework integrates consumers' willingness to pay (WTP) for the new food, the uncertainty of R&D processes, the associated regulatory cost of approval, and the competition between domestic and foreign products. With generic applicability, the model enables the quantitative analysis of new foods that could be introduced in markets and then traded across borders. We apply the framework to a hypothetical case of apples improved with NPETs. Simulation results suggest that import bans and high values of sunk cost can reduce R&D investment in NPETs to suboptimal levels.
Author(s)
Stéphan Marette, Anne‐célia Disdier, Anastasia Bodnar, John Beghin
Journal
- Journal of Agricultural Economics
Date of publication
- 2022
Keywords JEL
Keywords
- Apple
- Food innovation
- Genome editing
- New plant engineering techniques
- Trade
- Willingness to pay
Pages
- 1-20
URL of the HAL notice
Version
- 1