An Ex-ante Economic Evaluation of Patented Rootstocks for Apple Producers in New York State

Li, Lingyi

An Ex-ante Economic Evaluation of Patented Rootstocks for Apple Producers in New York State

Abstract

The establishment of the US public research system plays an important role in accelerating the development of the US agricultural economy. However, according to the technology treadmill theory, progress induced by advanced technologies have placed pressure on farmers to exit the industry. These farmers are potential clients and major political voices for public research sector. Lacking political support, the public research sector faces the severe challenge of covering its budgets. The introduction of the Bayh-Dole Act, by permitting public entities to charge for developed technology, offers them the opportunity to generate income from the private sector. Meanwhile, this lack of funding is unable to impede the pace of the public research sector to develop innovative biological technologies. This is due to the gap which has been caused by the private sector in its focus on inventing technology which caters to market demand. Moreover, the increasingly severe environmental challenges motivate a need for adaptive technologies. The Geneva apple rootstock that is the focus of this thesis, is one of the innovative biological technologies invented by the public research system. It is challenged by a lack of public funding as it aims to address various plant diseases exacerbated by dramatic global climate change. The goal of this thesis is to complete an ex-ante economic evaluation of adopting Geneva apple rootstocks. In order to do this, we review the literature evaluating the technology adoption process and methodologies in conducting ex-ante analysis and introduce expected utility theory to quantify the adoption decision results. Our results show yield and location play important roles in determining accumulated net present value. Geneva apple rootstocks improve the accumulated net present values by increasing yields. As for risk analysis, constant relative risk aversion function is appropriate to utilize in the long-term commitment perennial fruit industry. The Geneva rootstock generates a higher certainty equivalent than current rootstock infected by the plant disease, fire blight. Its estimated investment value ranges from $7.35 to $42.52 per tree as the probability of fire blight increases.

Date Issued

2019-08-30

Keywords

Agriculture economics

Committee Chair

Rickard, Bradley J.

Committee Member

Tauer, Loren William

Degree Discipline

Applied Economics and Management

Degree Name

M.S., Applied Economics and Management

Degree Level

Master of Science

Types

dissertation or thesis