The Role of Information in Technology Adoption: The Case of rbST in the California Dairy Industry

Abstract

Bovine somatotropin, a naturally-occurring hormone that enhances milk production in cows, can now be produced in large quantities using recombinant DNA technologies. Recent research suggests that the use of recombinant bovine somatotropin (rbST) could increase milk production an average of 12 percent per cow Office of Technology Assessment (OTA). Production could increase more or less depending on dairy management practices. In November of 1993, after reviewing rbST for more than nine years, the Food and Drug Administration (FDA) approved it for commercial use. This article analyzes, both analytically and empirically, producers' rbST adoption decisions in the preFDA-approval phase.