Nudging Farmers to Utilize Fertilizer: Theory and Experimental Evidence from Kenya
AbstractWhile many developing-country policymakers see heavy fertilizer subsidies as critical to raising agricultural productivity, most economists see them as distortionary, regressive, environmentally unsound, and argue that they result in politicized, inefficient distribution of fertilizer supply. We model farmers as facing small fixed costs of purchasing fertilizer, and assume some are stochastically present-biased and not fully sophisticated about this bias. Even when relatively patient, such farmers may procrastinate, postponing fertilizer purchases until later periods, when they may be too impatient to purchase fertilizer. Consistent with the model, many farmers in Western Kenya fail to take advantage of apparently profitable fertilizer investments, but they do invest in response to small, time-limited discounts on the cost of acquiring fertilizer (free delivery) just after harvest. Later discounts have a smaller impact, and when given a choice of price schedules, many farmers choose schedules that induce advance purchase. Calibration suggests such small, time-limited discounts yield higher welfare than either laissez faire or heavy subsidies by helping present-biased farmers commit to fertilizer use without inducing those with standard preferences to substantially overuse fertilizer.
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 C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7402.
Date of creation: Aug 2009
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Find related papers by JEL classification:
- D03 - Microeconomics - - General - - - Behavioral Microeconomics; Underlying Principles
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- O38 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Government Policy
This paper has been announced in the following NEP Reports:
- NEP-AGR-2009-11-27 (Agricultural Economics)
- NEP-ALL-2009-11-27 (All new papers)
- NEP-DEV-2009-11-27 (Development)
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.:
- Esther Duflo & Michael Kremer & Jonathan Robinson, 2008. "How High Are Rates of Return to Fertilizer? Evidence from Field Experiments in Kenya," American Economic Review, American Economic Association, vol. 98(2), pages 482-88, May.
- David Laibson & Andrea Repetto & Jeremy Tobacman, 2007.
"Estimating Discount Functions with Consumption Choices over the Lifecycle,"
Documentos de Trabajo
236, Centro de Economía Aplicada, Universidad de Chile.
- Jeremy Tobacman & David Laibson, 2007. "Estimating Discount Functions with Consumption Choices over the Lifecycle," Economics Series Working Papers 341, University of Oxford, Department of Economics.
- David Laibson & Andrea Repetto & Jeremy Tobacman, 2005. "Estimating Discount Functions with Consumption Choices over the Lifecycle," Levine's Bibliography 784828000000000643, UCLA Department of Economics.
- David Laibson & Andrea Repetto & Jeremy Tobacman, 2007. "Estimating Discount Functions with Consumption Choices over the Lifecycle," NBER Working Papers 13314, National Bureau of Economic Research, Inc.
- Michael Morris & Valerie A. Kelly & Ron J. Kopicki & Derek Byerlee, 2007. "Fertilizer Use in African Agriculture : Lessons Learned and Good Practice Guidelines," World Bank Publications, The World Bank, number 6650, July.
- Gulati, Ashok & Narayanan, Sudha, 2003. "The Subsidy Syndrome in Indian Agriculture," OUP Catalogue, Oxford University Press, number 9780195662061, October.
- Rodríguez-Planas, Núria, 2010. "Longer-Term Impacts of Mentoring, Educational Services, and Incentives to Learn: Evidence from a Randomized Trial," IZA Discussion Papers 4754, Institute for the Study of Labor (IZA).
- Wagner, Rodrigo & Zahler, Andrés, 2011.
"New exports from emerging markets: do followers benefit from pioneers ?,"
30312, University Library of Munich, Germany.
- Rodrigo Wagner & Andrés Zahler, 2011. "New Exports from Emerging Markets:Do Followers Beneit from Pioneers ?," Working Papers 18, Facultad de Economía y Empresa, Universidad Diego Portales.
- Rodríguez-Planas, Núria, 2010. "Mentoring, Educational Services, and Incentives to Learn: What Do We Know About Them?," IZA Discussion Papers 5255, Institute for the Study of Labor (IZA).
- Samuel Ferey & Yannick Gabuthy & Nicolas Jacquemet, 2013. "L'apport de l'économie expérimentale dans l'élaboration des politiques publiques," PSE - Labex "OSE-Ouvrir la Science Economique" halshs-00879205, HAL.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.