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The Effect Of Production Uncertainty And Information Dissemination On The Diffusion Of Irrigation Technologies

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  • Phoebe Koundouri

    (Dept. of International and European Economic Studies, Athens University of Economics and Business)

  • Celine Nauges
  • Vangelis TZOUVELEKAS

Abstract

In this paper we study the diffusion of modern irrigation technologies among a population of farmers, with a particular focus on risk and information dissemination through network and imitation effects. The major contribution of our work is to extend the traditional (theoretical) model of diffusion to account for production risk and the value of information about the new technology. This model is then applied to a sample of 385 farms located in Crete, Greece, to describe diffusion of modern irrigation technologies. Our results indicate that risk aversion plays a significant role and that farmers who are more sensitive to the risk of extreme events will adopt the modern irrigation technology earlier. Knowledge, experience and information dissemination are found to reduce time before adoption of the new technology, while farmers tend to learn more from and/or imitate farmers that are homophylic to them with respect to their education level, age and farm specialization.

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Paper provided by Athens University of Economics and Business in its series DEOS Working Papers with number 1009.

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Handle: RePEc:aue:wpaper:1009

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  1. Kerr, Suzi & Newell, Richard, 2001. "Policy-Induced Technology Adoption: Evidence from the U.S. Lead Phasedown," Discussion Papers, Resources For the Future dp-01-14, Resources For the Future.
  2. Phoebe Koundouri & Céline Nauges & Vangelis Tzouvelekas, 2006. "Technology Adoption under Production Uncertainty: Theory and Application to Irrigation Technology," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 88(3), pages 657-670.
  3. Kim, Kwansoo & Chavas, Jean-Paul, 2003. "Technological change and risk management: an application to the economics of corn production," Agricultural Economics, Blackwell, Blackwell, vol. 29(2), pages 125-142, October.
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  6. Chokri Dridi & Madhu Khanna, 2005. "Irrigation Technology Adoption and Gains from Water Trading under Asymmetric Information," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 87(2), pages 289-301.
  7. Schlag, Karl H., 1998. "Why Imitate, and If So, How?, : A Boundedly Rational Approach to Multi-armed Bandits," Journal of Economic Theory, Elsevier, Elsevier, vol. 78(1), pages 130-156, January.
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  14. Sherlund, Shane M. & Barrett, Christopher B. & Adesina, Akinwumi A., 2002. "Smallholder technical efficiency controlling for environmental production conditions," Journal of Development Economics, Elsevier, Elsevier, vol. 69(1), pages 85-101, October.
  15. Dinar, Ariel & Zilberman, David, 1991. "The economics of resource-conservation, pollution-reduction technology selection: The case of irrigation water," Resources and Energy, Elsevier, Elsevier, vol. 13(4), pages 323-348, December.
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  17. Ariel Dinar & Mark Campbell & David Zilberman, 1992. "Adoption of improved irrigation and drainage reduction technologies under limiting environmental conditions," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 2(4), pages 373-398, July.
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