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Valuing financial, health, and environmental benefits of Bt cotton in Pakistan

Author

Listed:
  • Shahzad Kouser

    (Georg-August-University Göttingen)

  • Matin Qaim

    (Georg-August-University Göttingen)

Abstract
Data from a farm survey and choice experiment are used to value the benefits of Bt cotton in Pakistan. Unlike previous research on the economic impacts of Bt, which mostly concentrated on financial benefits in terms of gross margins, we also quantify and monetize positive externalities associated with technology adoption. Due to lower chemical pesticide use on Bt cotton plots, there are significant health advantages in terms of reduced incidence of acute pesticide poisoning, and environmental advantages in terms of higher biodiversity and lower soil and groundwater contamination. These positive externalities are valued at US$ 79 per acre, of which half is attributable to health and the other half to environmental improvements. Adding average gross margin gains of US$ 204 results in an aggregate benefit of US$ 283 per acre of Bt, or US$ 1.7 billion for the total Bt cotton area in Pakistan.

Suggested Citation

  • Shahzad Kouser & Matin Qaim, 2012. "Valuing financial, health, and environmental benefits of Bt cotton in Pakistan," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 105, Courant Research Centre PEG.
    • Handle: RePEc:got:gotcrc:105
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    File URL: http://www2.vwl.wiso.uni-goettingen.de/courant-papers/CRC-PEG_DP_105.pdf
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    More about this item

    Keywords

    Bt cotton; Pesticide use; Health and environmental benefits; Choice experiment; Pakistan;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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