Selective Breeding, Heritable Characteristics and Genetic-Based Technological Change in the Canadian Beef Cattle Industry

Abstract

The paper presents an examination of genetic-based technological change in the Canadian beef cattle industry. A model of technological change is explicitly developed in characteristics space. Production functions with genetic characteristics as arguments are estimated and two forms of technological change identified. Shadow values for characteristics are then calculated and actual genetic improvements are compared to the improvements suggested by the shadow prices. It is concluded that market forces are sufficient to regulate the process of genetic-based technological change in the Canadian beef cattle industry. In agriculture a major component of technological change is genetic improvement. Economic analysis of technological change has traditionally been carried out in goods space. Economists have treated new varieties of rice or wheat as new goods which act as arguments in aggregate production functions. Genetic research, however, is carried out in terms of characteristics which are quantifiable and heritable. The process of selecting the characteristics to improve has been left to geneticists. In the North American beef cattle industry, however, the responsibility for genetic improvement lies primarily with the individual stock breeder. As the potential for genetic improvement in beef cattle is large, some assurance that the market provides the incentives to initiate improvements and that stockmen (most of whom have no formal training in genetics) recognize the incentives is desirable. Using the goods approach to production does not provide the means of examining the problem of selecting the appropriate genetic William A. Kerr is an Associate Professor in the De