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Willingness to Pay for a new farm technology given Risk Preferences. Evidence from an experimental auction in Kenya

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  • Channa, H.
  • Ricker-Gilbert, J.
  • De Groote, H.
  • Marenya, P.
  • Bauchet, J.

Abstract

This paper describes an experimental auction conducted among maize traders and farmers in Western Kenya to measure adoption for two low-cost technologies that can measure grain moisture content. Willingness-to-pay auctions (WTP) were combined with a risk preference lottery, allowing an opportunity to study the impact of risk preferences on technology adoption. The specifics of this technology also allows us to identify the impact of risk aversion on willingness to pay for a technology when production uncertainty is not part of the equation. We also randomized two variations of the BDM method for collecting WTP data allowing for a mechanism by which to study the impact of the method on valuation data. We find some evidence that risk aversion increased willingness to pay. Another result with implications in implementation of field experiments in the developing world is that farmers were sensitive to the method in which the auction was presented but traders were not. Acknowledgement :

Suggested Citation

  • Channa, H. & Ricker-Gilbert, J. & De Groote, H. & Marenya, P. & Bauchet, J., 2018. "Willingness to Pay for a new farm technology given Risk Preferences. Evidence from an experimental auction in Kenya," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277406, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae18:277406
    DOI: 10.22004/ag.econ.277406
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    1. Leavens, Laura & Bauchet, Jonathan & Ricker-Gilbert, Jacob, 2021. "After the project is over: Measuring longer-term impacts of a food safety intervention in Senegal," World Development, Elsevier, vol. 141(C).
    2. Herrington, Caitlin L. & Maredia, Mywish K. & Ortega, David L. & Reyes, Byron A., 2023. "The Impact of Endogenous and Exogenous Factors on Farmer Willingness-to-Pay for Biofortified Bean Seed: A Field Experiment in Rural Zimbabwe," 2023 Annual Meeting, July 23-25, Washington D.C. 335918, Agricultural and Applied Economics Association.
    3. Jack, B. Kelsey & McDermott, Kathryn & Sautmann, Anja, 2022. "Multiple price lists for willingness to pay elicitation," Journal of Development Economics, Elsevier, vol. 159(C).
    4. Ricker-Gilbert, Jacob & Moussa, Bokar & Abdoulaye, Tahirou, 2021. "Using Branding to Signal Quality in Informal Markets. Evidence from an Experimental Auction in the Sahel," 2021 Conference, August 17-31, 2021, Virtual 315284, International Association of Agricultural Economists.
    5. Goytom Abraha Kahsay & Workineh Asmare Kassie & Haileselassie Medhin & Lars Gårn Hansen, 2022. "Are religious farmers more risk taking? Empirical evidence from Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 53(4), pages 617-632, July.
    6. Jonathan Bauchet & Stacy Prieto & Jacob Ricker‐Gilbert, 2021. "Improved Drying and Storage Practices that Reduce Aflatoxins in Stored Maize: Experimental Evidence from Smallholders in Senegal," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(1), pages 296-316, January.
    7. Mao, Hui & Quan, Yurong & Fu, Yong & Chen, Shaojian, 2022. "Risk preferences, productive investment and straw return technology adoption by farmers in China," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322087, Agricultural and Applied Economics Association.

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