Risk, ambiguity and the adoption of new technologies: experimental evidence from a developing economy
AbstractThe slow adoption of innovations in less developed countries has long been a puzzle, given the high expected returns. This paper investigates the role of ambiguity-aversion as a fundamental behavioral determinant of technology adoption, motivated by the fact that, almost by definition, farmers have less certain information about the outcomes of new technologies compared with traditional technologies. Using primary data from field experiments used to measure behavioral parameters such as risk and ambiguity aversion, we find that farmers' aversion to ambiguity (but not risk aversion) limits the adoption of new technologies, even when expected profits are quite high. Interventions that reduce uncertainty (in place of interventions that reduce risk) seem a promising way of speeding up the adoption of innovations.
Download InfoIf 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.
Bibliographic InfoPaper provided by International Association of Agricultural Economists in its series 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil with number 126492.
Date of creation: 2012
Date of revision:
International Development; Research and Development/Tech Change/Emerging Technologies; Risk and Uncertainty;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-07-23 (All new papers)
- NEP-EXP-2012-07-23 (Experimental Economics)
- NEP-UPT-2012-07-23 (Utility Models & Prospect Theory)
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.:
- Halevy, Yoram, 2005.
"Ellsberg Revisited: an Experimental Study,"
Microeconomics.ca working papers
halevy-05-07-26-11-51-13, Vancouver School of Economics, revised 25 Feb 2014.
- John A. List, 2003.
"Does Market Experience Eliminate Market Anomalies?,"
The Quarterly Journal of Economics,
MIT Press, vol. 118(1), pages 41-71, February.
- John List, 2003. "Does market experience eliminate market anomalies?," Natural Field Experiments 00297, The Field Experiments Website.
- 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.
- Akay, Alpaslan & Martinsson, Peter & Medhin, Haileselassie & Trautmann, Stefan, 2010.
"Attitudes Toward Uncertainty Among the Poor: Evidence from Rural Ethiopia,"
dp-10-04-efd, Resources For the Future.
- Akay, Alpaslan & Martinsson, Peter & Medhin, Haileselassie & Trautmann, Stefan T., 2009. "Attitudes toward Uncertainty among the Poor: Evidence from Rural Ethiopia," IZA Discussion Papers 4225, Institute for the Study of Labor (IZA).
- Terry L. Kastens & Allen M. Featherstone, 1996. "Feedforward Backpropagation Neural Networks in Prediction of Farmer Risk Preferences," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 400-415.
- Ephraim Nkonya & Ted Schroeder & David Norman, 1997. "Factors Affecting Adoption Of Improved Maize Seed And Fertiliser In Northern Tanzania," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1-3), pages 1-12.
- Jim Engle-Warnick & Javier Escobal & Sonia Laszlo, 2007.
"Ambiguity Aversion as a Predictor of Technology Choice: Experimental Evidence from Peru,"
CIRANO Working Papers
- Jim Engle-Warnick & Javier Escobal & Sonia Laszlo, 2007. "Ambiguity Aversion As A Predictor Of Technology Choice: Experimental Evidence From Peru," Departmental Working Papers 2007-04, McGill University, Department of Economics.
- Duraisamy, P., 2002.
"Changes in returns to education in India, 1983-94: by gender, age-cohort and location,"
Economics of Education Review,
Elsevier, vol. 21(6), pages 609-622, December.
- Duraisamy, P., 2000. "Changes in Returns to Education in India, 1983-94: By Gender, Age-Cohort and Location," Papers 815, Yale - Economic Growth Center.
- P. Duraisamy, 2000. "Changes in Returns to Education in India, 1983-94: By Gender, Age-Cohort and Location," Working Papers 815, Economic Growth Center, Yale University.
- Brian W. Gould & William E. Saupe & Richard M. Klemme, 1989. "Conservation Tillage: The Role of Farm and Operator Characteristics and the Perception of Soil Erosion," Land Economics, University of Wisconsin Press, vol. 65(2), pages 167-185.
- Sunding, David & Zilberman, David, 2001. "The agricultural innovation process: Research and technology adoption in a changing agricultural sector," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 4, pages 207-261 Elsevier.
- John Knight & Sharada Weir & Tassew Woldehanna, 2003. "The role of education in facilitating risk-taking and innovation in agriculture," Journal of Development Studies, Taylor & Francis Journals, vol. 39(6), pages 1-22.
- Sujoy Chakravarty & Jaideep Roy, 2009. "Recursive expected utility and the separation of attitudes towards risk and ambiguity: an experimental study," Theory and Decision, Springer, vol. 66(3), pages 199-228, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.