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Social Learning and Parameter Uncertainty in Irreversible Investment----Evidence from Greenhouse Adoption in Northern China

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Author Info
Wang, Honglin
Reardon, Thomas

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Abstract

This paper introduces social learning into irreversible investment theory through parameter uncertainty, and shows that social learning could reduce parameter uncertainty to facilitate irreversible investment technology adoption. The theoretic model is tested by using household level data from energy saving greenhouse adoption in northern China, and empirical evidences are consistent with the theory: social learning has significantly positive impacts on greenhouse adoption, while market volatility discourages the adoption.

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Publisher Info
Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida with number 6310.

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Date of creation: 2008
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Handle: RePEc:ags:aaea08:6310

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Related research
Keywords: Social Learning; Technology Adoption; Irreversible Investment; Parameter Uncertainty; Energy Saving Greenhouse; Environmental Economics and Policy; Research and Development/Tech Change/Emerging Technologies; O12; O31; C61; D83; G12;

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  12. Feder, Gershon & Just, Richard E & Zilberman, David, 1985. "Adoption of Agricultural Innovations in Developing Countries: A Survey," Economic Development and Cultural Change, University of Chicago Press, vol. 33(2), pages 255-98, January.
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    Other versions:
  15. Olmstead, Alan L & Rhode, Paul, 1993. "Induced Innovation in American Agriculture: A Reconsideration," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 100-118, February. [Downloadable!] (restricted)
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