Money matters: The role of yields and profits in agricultural technology adoption

Jeffrey D. Michler*, Emilia Tjernström, Simone Verkaart, Kai Mausch

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

15 Citations (Scopus)

Abstract

Despite the growing attention to technology adoption in the economics literature, knowledge gaps remain regarding why some valuable technologies are rapidly adopted, while others are not. This paper contributes to our understanding of agricultural technology adoption by showing that a focus on yield gains may, in some contexts, be misguided. We study a technology in Ethiopia that has no impact on yields, but that has nonetheless been widely adopted. Using three waves of panel data, we estimate a correlated random coefficient model and calculate the returns to improved chickpea in terms of yields, costs, and profits. We find that farmers’ comparative advantage does not play a significant role in their adoption decisions and hypothesize that this is due to the overall high economic returns to adoption, despite the limited yield impacts of the technology. Our results suggest economic measures of returns may be more relevant than increases in yields in explaining technology adoption decisions.

Original languageEnglish
Pages (from-to)710-731
Number of pages22
JournalAmerican Journal of Agricultural Economics
Volume101
Issue number3
DOIs
Publication statusPublished - 23 Jul 2019

Keywords

  • Correlated random coefficients
  • Ethiopia
  • Heterogeneity
  • Technology adoption

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