Valuing New Random Genetically Modified (GM) Traits with Real Options: The Case of Drought-Tolerant Wheat

William Wilson; Sumadhur Shakya; Bruce Dahl

doi:10.1108/AFR-05-2014-0014

Valuing New Random Genetically Modified (GM) Traits with Real Options: The Case of Drought-Tolerant Wheat

William Wilson, Sumadhur Shakya, Bruce Dahl

College of Business

Research output: Contribution to journal › Article › peer-review

Abstract

 Purpose
 – The purpose of this paper is to develop an analytical model to value traits at different developmental phases and to determine the value of drought tolerance (DT) in wheat using GM technology.
 
 Design/methodology/approach
 – A stochastic binomial real-options model of GM traits was developed to estimate the value of a DT wheat trait.
 
 Findings
 – The results indicate that the value of DT wheat using GM technology is in-the-money at each development phase. The greatest value would accrue for the Prairie Gateway and Northern Great Plains regions in the USA.
 
 Research limitations/implications
 – The approach is useful for valuing high-cost risky investments in technology and results provide guidance for development strategies.
 
 Originality/value
 – The model is original and its applications to wheat are unique.

Original language	American English
Journal	Agricultural Finance Review
Volume	75
DOIs	https://doi.org/10.1108/AFR-05-2014-0014
State	Published - 2015

Keywords

Drought tolerant
Genetically modified
Random
Real options
Stochastic efficiency
Trait valuation
Wheat

Disciplines

Agribusiness

Access to Document

10.1108/AFR-05-2014-0014License: Unspecified

Cite this

@article{fe7c9c30f8fd47e4aefd67b9dc0ec6c6,

title = "Valuing New Random Genetically Modified (GM) Traits with Real Options: The Case of Drought-Tolerant Wheat",

abstract = " Purpose – The purpose of this paper is to develop an analytical model to value traits at different developmental phases and to determine the value of drought tolerance (DT) in wheat using GM technology. Design/methodology/approach – A stochastic binomial real-options model of GM traits was developed to estimate the value of a DT wheat trait. Findings – The results indicate that the value of DT wheat using GM technology is in-the-money at each development phase. The greatest value would accrue for the Prairie Gateway and Northern Great Plains regions in the USA. Research limitations/implications – The approach is useful for valuing high-cost risky investments in technology and results provide guidance for development strategies. Originality/value – The model is original and its applications to wheat are unique.",

keywords = "Drought tolerant, Genetically modified, Random, Real options, Stochastic efficiency, Trait valuation, Wheat",

author = "William Wilson and Sumadhur Shakya and Bruce Dahl",

note = "The date on your computer is in the past. If your computer's clock shows a date before 1 Jan 1970, the browser will automatically forget the cookie. To fix this, set the correct time and date on your computer.",

year = "2015",

doi = "10.1108/AFR-05-2014-0014",

language = "American English",

volume = "75",

journal = "Agricultural Finance Review",

}

TY - JOUR

T1 - Valuing New Random Genetically Modified (GM) Traits with Real Options: The Case of Drought-Tolerant Wheat

AU - Wilson, William

AU - Shakya, Sumadhur

AU - Dahl, Bruce

N1 - The date on your computer is in the past. If your computer's clock shows a date before 1 Jan 1970, the browser will automatically forget the cookie. To fix this, set the correct time and date on your computer.

PY - 2015

Y1 - 2015

N2 - Purpose – The purpose of this paper is to develop an analytical model to value traits at different developmental phases and to determine the value of drought tolerance (DT) in wheat using GM technology. Design/methodology/approach – A stochastic binomial real-options model of GM traits was developed to estimate the value of a DT wheat trait. Findings – The results indicate that the value of DT wheat using GM technology is in-the-money at each development phase. The greatest value would accrue for the Prairie Gateway and Northern Great Plains regions in the USA. Research limitations/implications – The approach is useful for valuing high-cost risky investments in technology and results provide guidance for development strategies. Originality/value – The model is original and its applications to wheat are unique.

AB - Purpose – The purpose of this paper is to develop an analytical model to value traits at different developmental phases and to determine the value of drought tolerance (DT) in wheat using GM technology. Design/methodology/approach – A stochastic binomial real-options model of GM traits was developed to estimate the value of a DT wheat trait. Findings – The results indicate that the value of DT wheat using GM technology is in-the-money at each development phase. The greatest value would accrue for the Prairie Gateway and Northern Great Plains regions in the USA. Research limitations/implications – The approach is useful for valuing high-cost risky investments in technology and results provide guidance for development strategies. Originality/value – The model is original and its applications to wheat are unique.

KW - Drought tolerant

KW - Genetically modified

KW - Random

KW - Real options

KW - Stochastic efficiency

KW - Trait valuation

KW - Wheat

UR - http://www.emeraldinsight.com/doi/full/10.1108/AFR-05-2014-0014

U2 - 10.1108/AFR-05-2014-0014

DO - 10.1108/AFR-05-2014-0014

M3 - Article

VL - 75

JO - Agricultural Finance Review

JF - Agricultural Finance Review

ER -

Valuing New Random Genetically Modified (GM) Traits with Real Options: The Case of Drought-Tolerant Wheat

Abstract

Keywords

Disciplines

Access to Document

Other files and links

Cite this