(Translated by https://www.hiragana.jp/)
Testing for Complementarity: Glyphosate Tolerant Soybeans and Conservation Tillage
IDEAS home Printed from https://ideas.repec.org/a/oup/ajagec/v98y2016i3p765-784..html
   My bibliography  Save this article

Testing for Complementarity: Glyphosate Tolerant Soybeans and Conservation Tillage

Author

Listed:
  • Edward D. Perry
  • GianCarlo Moschini
  • David A. Hennessy

Abstract

Many decisions in agriculture are made over combinations of inputs and/or practices that may form a technology system linked through complementarity. The presence of complementarity among producer decisions can have far-reaching implications for market outcomes and for the effectiveness of policies intended to influence them. Identifying complementarity relations, however, is made difficult by the presence of unobserved heterogeneity. Drawing on recent methodological advances, in this paper we develop a test for complementarity between glyphosate tolerant soybeans and conservation tillage that overcomes certain limitations of previous studies. Specifically, we develop a structural discrete choice framework of joint soybean-tillage adoption that explicitly models both complementarity and the correlation induced by unobserved heterogeneity. The model is estimated with a large unbalanced panel of farm-level choices spanning the 1998–2011 period. We find that glyphosate tolerant soybeans and conservation tillage are complementary practices. In addition, our estimation shows that farm operation scale promotes the adoption of both conservation tillage and glyphosate tolerant seed, and that all of higher fuel prices, more droughty conditions, and soil erodibility increase use of conservation tillage. We apply our results to simulate annual adoption rates for both conservation tillage and no-tillage in a scenario without glyphosate tolerant soybeans available as a choice. We find that the adoption of conservation tillage and no-tillage have been about 10% and 20% higher, respectively, due to the advent of glyphosate tolerant soybeans.

Suggested Citation

  • Edward D. Perry & GianCarlo Moschini & David A. Hennessy, 2016. "Testing for Complementarity: Glyphosate Tolerant Soybeans and Conservation Tillage," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(3), pages 765-784.
    • Handle: RePEc:oup:ajagec:v:98:y:2016:i:3:p:765-784.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/ajae/aaw001
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. JunJie Wu & Bruce A. Babcock, 1998. "The Choice of Tillage, Rotation, and Soil Testing Practices: Economic and Environmental Implications," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(3), pages 494-511.
    2. Arora, Ashish, 1996. "Testing for complementarities in reduced-form regressions: A note," Economics Letters, Elsevier, vol. 50(1), pages 51-55, January.
    3. Fuglie, Keith O., 1999. "Conservation Tillage And Pesticide Use In The Cornbelt," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 31(1), pages 1-15, April.
    4. GianCarlo Moschini, 2008. "Biotechnology and the development of food markets: retrospect and prospects," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 35(3), pages 331-355, September.
    5. Tobias Kretschmer & Eugenio J. Miravete & Jose C. Pernias, 2012. "Competitive Pressure and the Adoption of Complementary Innovations," American Economic Review, American Economic Association, vol. 102(4), pages 1540-1570, June.
    6. Matthew Gentzkow, 2007. "Valuing New Goods in a Model with Complementarity: Online Newspapers," American Economic Review, American Economic Association, vol. 97(3), pages 713-744, June.
    7. Kenneth Train ., 2000. "Halton Sequences for Mixed Logit," Economics Working Papers E00-278, University of California at Berkeley.
    8. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, September.
    9. Ding, Ya & Schoengold, Karina & Tadesse, Tsegaye, 2009. "The Impact of Weather Extremes on Agricultural Production Methods: Does Drought Increase Adoption of Conservation Tillage Practices?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 34(3), pages 1-17, December.
    10. Roberts, Roland K. & English, Burton C. & Gao, Qi & Larson, James A., 2006. "Simultaneous Adoption of Herbicide-Resistance and Conservation-Tillage Cotton Technologies," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 38(3), pages 1-15, December.
    11. Arne Risa Hole, 2007. "Fitting mixed logit models by using maximum simulated likelihood," Stata Journal, StataCorp LP, vol. 7(3), pages 388-401, September.
    12. Geoffrey Barrows & Steven Sexton & David Zilberman, 2014. "Agricultural Biotechnology: The Promise and Prospects of Genetically Modified Crops," Journal of Economic Perspectives, American Economic Association, vol. 28(1), pages 99-120, Winter.
    13. Knowler, Duncan & Bradshaw, Ben, 2007. "Farmers' adoption of conservation agriculture: A review and synthesis of recent research," Food Policy, Elsevier, vol. 32(1), pages 25-48, February.
    14. Jeffrey H. Dorfman, 1996. "Modeling Multiple Adoption Decisions in a Joint Framework," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(3), pages 547-557.
    15. A. Colin Cameron & Pravin K. Trivedi, 2010. "Microeconometrics Using Stata, Revised Edition," Stata Press books, StataCorp LP, number musr, March.
    16. Aviv Nevo & Michael D. Whinston, 2010. "Taking the Dogma out of Econometrics: Structural Modeling and Credible Inference," Journal of Economic Perspectives, American Economic Association, vol. 24(2), pages 69-82, Spring.
    17. Steve Berry & Ahmed Khwaja & Vineet Kumar & Andres Musalem & Kenneth Wilbur & Greg Allenby & Bharat Anand & Pradeep Chintagunta & W. Hanemann & Przemek Jeziorski & Angelo Mele, 2014. "Structural models of complementary choices," Marketing Letters, Springer, vol. 25(3), pages 245-256, September.
    18. Athey, Susan. & Stern, Scott, 1969-, 1998. "An empirical framework for testing theories about complementarity in orgaziational design," Working papers WP 4022-98., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    19. Meredith J. Soule & Abebayehu Tegene & Keith D. Wiebe, 2000. "Land Tenure and the Adoption of Conservation Practices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 993-1005.
    20. Matin Qaim, 2009. "The Economics of Genetically Modified Crops," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 665-694, September.
    21. Fernandez-Cornejo, Jorge & Livingston, Michael J. & Mitchell, Lorraine & Wechsler, Seth, 2014. "Genetically Engineered Crops in the United States," Economic Research Report 164263, United States Department of Agriculture, Economic Research Service.
    22. Keane, Michael P, 1992. "A Note on Identification in the Multinomial Probit Model," Journal of Business & Economic Statistics, American Statistical Association, vol. 10(2), pages 193-200, April.
    23. Miravete, Eugenio J. & Pernías, José C., 2010. "Testing for complementarity when strategies are dichotomous," Economics Letters, Elsevier, vol. 106(1), pages 28-31, January.
    24. Bruno Cassiman & Reinhilde Veugelers, 2006. "In Search of Complementarity in Innovation Strategy: Internal R& D and External Knowledge Acquisition," Management Science, INFORMS, vol. 52(1), pages 68-82, January.
    25. Fernandez-Cornejo, Jorge & Klotz-Ingram, Cassandra & Jans, Sharon, 2002. "Farm-Level Effects Of Adopting Herbicide-Tolerant Soybeans In The U.S.A," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 34(1), pages 1-15, April.
    26. Arora, Ashish & Gambardella, Alfonso, 1990. "Complementarity and External Linkages: The Strategies of the Large Firms in Biotechnology," Journal of Industrial Economics, Wiley Blackwell, vol. 38(4), pages 361-379, June.
    27. Fernandez-Cornejo, Jorge & Klotz-Ingram, Cassandra & Jans, Sharon, 2002. "Farm-Level Effects of Adopting Herbicide-Tolerant Soybeans in the U.S.A," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 34(1), pages 149-163, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fares, M’hand & Raza, Saqlain & Thomas, Alban, 2018. "Is there complementarity between labels and brands? Evidence from small French co-operatives," TSE Working Papers 18-895, Toulouse School of Economics (TSE).
    2. Arora, Ashish & Forman, Chris & Yoon, Ji Woong, 2010. "Complementarity and information technology adoption: Local area networks and the Internet," Information Economics and Policy, Elsevier, vol. 22(3), pages 228-242, July.
    3. M’hand Fares & Saqlain Raza & Alban Thomas, 2018. "Is There Complementarity Between Certified Labels and Brands? Evidence from Small French Cooperatives," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 53(2), pages 367-395, September.
    4. Veugelers, Reinhilde & Hottenrott, Hanna & Rexhäuser, Sascha, 2012. "Green innovations and organisational change: making better use of environmental technology," CEPR Discussion Papers 9055, C.E.P.R. Discussion Papers.
    5. Hottenrott, Hanna & Rexhäuser, Sascha & Veugelers, Reinhilde, 2016. "Organisational change and the productivity effects of green technology adoption," Resource and Energy Economics, Elsevier, vol. 43(C), pages 172-194.
    6. Charles Hoffreumon & Chris Forman & Nicolas van Zeebroeck, 2024. "Make or buy your artificial intelligence? Complementarities in technology sourcing," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 33(2), pages 452-479, March.
    7. M'hand Fares, 2014. "Using a multinomial probit to test for complementarity," Applied Economics Letters, Taylor & Francis Journals, vol. 21(3), pages 180-184, February.
    8. L. Toma & A. P. Barnes & L.-A. Sutherland & S. Thomson & F. Burnett & K. Mathews, 2018. "Impact of information transfer on farmers’ uptake of innovative crop technologies: a structural equation model applied to survey data," The Journal of Technology Transfer, Springer, vol. 43(4), pages 864-881, August.
    9. Bruno Cassiman & Giovanni Valentini, 2016. "Open innovation: Are inbound and outbound knowledge flows really complementary?," Strategic Management Journal, Wiley Blackwell, vol. 37(6), pages 1034-1046, June.
    10. Hou, Jun & Mohnen, Pierre, 2013. "Complementarity between internal knowledge creation and external knowledge sourcing in developing countries," MERIT Working Papers 2013-010, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    11. Teklewold, Hailemariam & Kassie, Menale & Shiferaw, Bekele & Köhlin, Gunnar, 2013. "Cropping system diversification, conservation tillage and modern seed adoption in Ethiopia: Impacts on household income, agrochemical use and demand for labor," Ecological Economics, Elsevier, vol. 93(C), pages 85-93.
    12. Federico Ciliberto & GianCarlo Moschini & Edward D. Perry, 2019. "Valuing product innovation: genetically engineered varieties in US corn and soybeans," RAND Journal of Economics, RAND Corporation, vol. 50(3), pages 615-644, September.
    13. Gilli, Marianna & Mancinelli, Susanna & Mazzanti, Massimiliano, 2014. "Innovation complementarity and environmental productivity effects: Reality or delusion? Evidence from the EU," Ecological Economics, Elsevier, vol. 103(C), pages 56-67.
    14. Areal, Francisco J. & Riesgo, Laura & Gómez-Barbero, Manuel & Rodríguez-Cerezo, Emilio, 2012. "Consequences of a coexistence policy on the adoption of GMHT crops in the European Union," Food Policy, Elsevier, vol. 37(4), pages 401-411.
    15. Lukasz Grzybowski & Frank Verboven, 2016. "Substitution between fixed-line and mobile access: the role of complementarities," Journal of Regulatory Economics, Springer, vol. 49(2), pages 113-151, April.
    16. Masschelein, Stijn & Moers, Frank, 2020. "Testing for complementarities between accounting practices," Accounting, Organizations and Society, Elsevier, vol. 86(C).
    17. Dependra Bhatta & Krishna P. Paudel & Kai Liu, 2023. "Factors influencing water conservation practices adoptions by Nepali farmers," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(10), pages 10879-10901, October.
    18. Robert Donnelly & Francisco J.R. Ruiz & David Blei & Susan Athey, 2021. "Counterfactual inference for consumer choice across many product categories," Quantitative Marketing and Economics (QME), Springer, vol. 19(3), pages 369-407, December.
    19. Wade, Tara & Kurkalova, Lyubov A. & Secchi, Silvia, 2012. "Using the logit model with aggregated choice data in estimation of Iowa corn farmers’ conservation tillage subsidies," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124974, Agricultural and Applied Economics Association.
    20. Teklewold, Hailemariam & Mekonnen, Alemu, 2017. "The Tilling of Land in a Changing Climate: Panel Data Evidence from the Nile Basin of Ethiopia," EfD Discussion Paper 17-3, Environment for Development, University of Gothenburg.

    More about this item

    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:ajagec:v:98:y:2016:i:3:p:765-784.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.