A conceptual model is developed to evaluate the effect of Bt maize on risk. The model is applied to the case of dryland maize in Boone County, Iowa and irrigated maize in Cuming County, Nebraska (USA). Results highlight the importance of distinguishing between marginal and aggregate risk effects and demonstrate that the effect of Bt maize on risk depends crucially on the price paid for the technology. Empirical results show that, depending on the price, Bt maize can be marginally risk increasing or decreasing and can either increase or decrease maize acreage. Also, depending on the price, Bt maize can provide a risk benefit to farmers, even when Bt maize is risk increasing.
