The Canadian beef cattle industry has experienced significant technological advancement since 1966, when quarantine restrictions were amended to allow imports of breeding stock from continental Europe. Quarantine station construction and subsequent imports of cattle breeds provided a necessary, but not sufficient, condition for rapid genetic-based technological change. This technological improvement, however, depended in part on establishing breeding enterprises across the country. In 1966, the choice of breeding stock available to commercial cattlemen was restricted to three traditional breeds-Hereford, Aberdeen Angus and Shorthorn. Ten years later, Cattlemen listed twenty-six most popular Canadian breeds. This diffusion of new cattle breeds is a multiproduct example of the availability problem identified by Griliches, who suggested that the adoption of new technologies cannot commence unless they are available for farm use. Griliches developed a model using expected profitability in various geographic areas to explain varying entry dates for firms developing, producing, and marketing hybrid corn. His model suggested that the relative profitability of a market area depends upon the area's market size, marketing costs, the expected acceptance rate, and the innovation (or education) costs. The larger the market size, the lower the marketing costs, the faster the expected acceptance rate, and the lower the cost of educating farmers, the more profitable the area will appear. In turn, the greater the area's expected profit, the earlier firms will supply the new product to the area. Cordrey used the same model to explain the establishment of local artificial insemination units for the dairy industry. A similar model by Kerr explained the availability of new breeding stock to the Canadian beef cattle industry. Numerous breeds were used in the estimation, allowing the model to be tested for consistency across commodities and over time. The diffusion process in this case was very long, estimated at twenty-five to thirty years for each breed. When the diffusion process is lengthy, it creates serious analytical problems. If one uses ex post data, as did Griliches and Cordrey, the results are outdated and of limited use in enhancing efficiency by increasing availability. If one uses current data of an existing process, the data are incomplete; and this leads to a range of problems related to truncated samples. In this study of the introduction of exotic breeds into Canada, the diffusion process is still occurring; so that the data set is truncated and therefore not normally distributed. As a result, ordinary least squares (OLS) estimation would be biased. Consequently, a maximum likelihood (ML) technique was used to obtain estimates which compensate for truncation problems. These results were used to evaluate factors affecting the diffusion process and to test for similarities in the pattern between breeds.
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Aug 1, 2000
F.A Munroe + 2
Open Access