Simultaneous Diffusion of Herbicide Tolerant Cotton and Conservation Tillage

1. Simultaneous Diffusion of Herbicide Tolerant Cotton and Conservation Tillage George B. Frisvold, University of Arizona Abigail Boor, American Express Jeanne M. Reeves, Cotton Incorporated Cotton Economics and Marketing Conference Beltwide Cotton Conferences New Orleans, LA January 9 – 12

2. Research Questions • Does diffusion of herbicide-tolerant (HT) cotton encourage diffusion of conservation tillage? • Does diffusion of conservation tillage practices encourage diffusion of HT cotton? • What other economic or agronomic factors explain technology diffusion?

3. Methods • Simultaneous equation estimation of two dynamic diffusion curves • 3SLS estimation to account for simultaneity of diffusion

4. Data • State-level time series – cross section data from 1997 – 2002 • HT cotton adoption data from USDA AMS • Conservation tillage data from CTIC

5. Logistic Diffusion Curve % Adopting K – Adoption Ceiling b characterizes speed of movement from a to K Time a characterizes initial adoption

6. Effect of b on Diffusion Rate % Adopting Fast Adoption Large b Slow Adoption Small b Time

7. Diffusion Curves for HT Cotton and Conservation Tillage HTit = Ki / [ 1 + exp (– ai– bit t – uit )] CTit = Zi / [ 1 + exp (– ci– dit t – vit )] HTit = % of State’s cotton acres planted to HT cotton CTit = % of State’s cotton acres adopting conservation tillage Ki , Zi = adoption ceiling parameters

8. Technology Availability Parameters ai , ci = origin or technology supplyparameters ai = a0 + a1 PARENT +a2 CALAW ci = c0

9. Technology Acceptance Variables bi , di = acceptance or diffusion rateparameters bi = b0 + b1 ln(CTit) +b2 COTPRICE +b3 GLYPHPRICE+b4 PCHARVEST di = d0 + d1 ln(HTit) +d2 COTPRICE +d3 PRECIP+d4 LANDVALUE+d5 PCHEL

10. HT Cotton Diffusion Curve Regression

11. Conservation Tillage Diffusion Curve Regression

12. Cross Elasticities ofTechnology Adoption

13. Conclusions • Diffusion of conservation tillage and herbicide resistant cotton are mutually reinforcing • At sample means • A 1% increase in a state’s adoption rate for HT cotton increases the state’s adoption rate for conservation tillage by 0.48% • A 1% increase in the adoption rate of conservation tillage increases the adoption rate of HT cotton by 0.16%

14. Conclusions • Other factors affecting HT cotton adoption: • Availability of seed varieties adapted to local conditions • Cotton price • Harvested / planted acres • Other factors affecting conservation tillage adoption • Extent of HEL land • Precipitation • Land values (a proxy for urbanization)