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The Impact Of Recombinant Bovine Somatotropin On Dairy Farm Profits: A Switching Regression Analysis

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  • Tauer, Loren W.

Abstract

Production and profit impacts from the use of recombinant Bovine Somatotropin (rbST) on dairy farms were estimated using switching regression, with separate regressions for rbST-using farms and non-rbST-using farms. To correct for potential self-selection bias, a probit adoption function was estimated and used to correct the error term in each regression equation. Farmers who use rbST were found to have more formal education and have larger dairy herds, but age was not a significant determining factor in adoption. RbST was estimated to increase milk production per cow even when correcting for the fact that rbST users would have higher milk production per cow without the use of rbST. However, that greater production per cow from rbST use did not translate into an estimated impact on profits per cow.

Suggested Citation

  • Tauer, Loren W., 2004. "The Impact Of Recombinant Bovine Somatotropin On Dairy Farm Profits: A Switching Regression Analysis," 2004 Annual meeting, August 1-4, Denver, CO 20411, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea04:20411
    DOI: 10.22004/ag.econ.20411
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    References listed on IDEAS

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    1. Zdenko Stefanides & Loren W. Tauer, 1999. "The Empirical Impact of Bovine Somatotropin on a Group of New York Dairy Farms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 95-102.
    2. Bradford L. Barham, 1996. "Adoption of a Politicized Technology: bST and Wisconsin Dairy Farmers," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(4), pages 1056-1063.
    3. Vella, Francis & Verbeek, Marno, 1999. "Estimating and Interpreting Models with Endogenous Treatment Effects," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(4), pages 473-478, October.
    4. Loren Tauer & Zdenko Stefanides, 1998. "Success in maximizing profits and reasons for profit deviation on dairy farms," Applied Economics, Taylor & Francis Journals, vol. 30(2), pages 151-156, February.
    5. Bruce W. Marion & Robert L. Wills, 1990. "A Prospective Assessment of the Impacts of Bovine Somatotropin: A Case Study of Wisconsin," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(2), pages 326-336.
    6. Jeremy D. Foltz & Hsiu-Hui Chang, 2002. "The Adoption and Profitability of rbST on Connecticut Dairy Farms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(4), pages 1021-1032.
    7. Knoblauch, Wayne A. & Putnam, Linda D., 1998. "Dairy Farm Management: Business Summary New York State 1997," Research Bulletins 122692, Cornell University, Department of Applied Economics and Management.
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    Cited by:

    1. Kolady, Deepthi & Lesser, William H., 2005. "Adoption of Genetically Modified Eggplant in India: An Ex Ante Analysis," 2005 Annual meeting, July 24-27, Providence, RI 19262, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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