Advanced Search
MyIDEAS: Login to save this paper or follow this series

A Dynamic Adoption Model with Bayesian Learning: Application to the U.S. Soybean Market

Contents:

Author Info

  • Ma, Xingliang
  • Shi, Guanming

Abstract

Agricultural technology adoption is often a sequential process. Farmers may adopt a new technology in part of their land first and then adjust in later years based on what they learn from the earlier partial adoption. This paper presents a dynamic adoption model with Bayesian learning, in which forward-looking farmers learn from their own experience and from their neighbors about the new technology. The model is compared to that of a myopic model, in which farmers only maximize their current benefits. We apply the analysis to a sample of U.S. soybean farmers from year 2000 to 2004 to examine their adoption pattern of a newly developed genetically modified (GM) seed technology. We show that the myopic model predicts lower adoption rates in early years than the dynamic model does, implying that myopic farmers underestimate the value of early adoption. My results suggest that farmers in my sample are more likely to be forward-looking decision makers and they tend to rely more on learning from their own experience than learning from their neighbors.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://purl.umn.edu/104577
Download Restriction: no

Bibliographic Info

Paper provided by Agricultural and Applied Economics Association in its series 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania with number 104577.

as in new window
Length:
Date of creation: 2011
Date of revision:
Handle: RePEc:ags:aaea11:104577

Contact details of provider:
Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202
Phone: (414) 918-3190
Fax: (414) 276-3349
Email:
Web page: http://www.aaea.org
More information through EDIRC

Related research

Keywords: technology adoption; Bayesian learning; structural estimation; Agribusiness; Agricultural and Food Policy; Crop Production/Industries; Industrial Organization; Production Economics; Research and Development/Tech Change/Emerging Technologies; Research Methods/ Statistical Methods; Risk and Uncertainty; Teaching/Communication/Extension/Profession;

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Gregory S. Crawford & Matthew Shum, 2005. "Uncertainty and Learning in Pharmaceutical Demand," Econometrica, Econometric Society, vol. 73(4), pages 1137-1173, 07.
  2. Pilar Useche & Bradford L. Barham & Jeremy D. Foltz, 2006. "Integrating Technology Traits and Producer Heterogeneity: A Mixed-Multinomial Model of Genetically Modified Corn Adoption," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(2), pages 444-461.
  3. 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.
  4. Lisa A. Cameron, 1999. "The Importance of Learning in the Adoption of High-Yielding Variety Seeds," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 83-94.
  5. Munshi, Kaivan, 2004. "Social learning in a heterogeneous population: technology diffusion in the Indian Green Revolution," Journal of Development Economics, Elsevier, vol. 73(1), pages 185-213, February.
  6. Terrance M. Hurley & Paul D. Mitchell & Marlin E. Rice, 2004. "Risk and the Value of Bt Corn," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(2), pages 345-358.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Liam Graham, 2011. "Individual rationality, model-consistent expectations and learning," CDMA Working Paper Series 201112, Centre for Dynamic Macroeconomic Analysis.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ags:aaea11:104577. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.