Ambiguity Aversion As A Predictor Of Technology Choice: Experimental Evidence From Peru
AbstractThe lack of adoption of new farming technologies despite known benefits is a well-documented phenomenon in development economics. In addition to a number of market constraints, risk aversion predominates the discussion of behavioral determinants of technology adoption. We hypothesize that ambiguity aversion may also be a determinant, since farmers may have less information about the distribution of yield outcomes from new technologies compared with traditional technologies. We test this hypothesis with a laboratory experiment in the field in which we measure risk and ambiguity preferences. We combine our experiment with a survey in which we collect information on farm decisions and identify market constraints. We find that ambiguity aversion does indeed predict actual technology choices on the farm.
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Bibliographic InfoPaper provided by McGill University, Department of Economics in its series Departmental Working Papers with number 2007-04.
Length: 43 pages
Date of creation: May 2007
Date of revision:
Other versions of this item:
- Jim Engle-Warnick & Javier Escobal & Sonia Laszlo, 2007. "Ambiguity Aversion as a Predictor of Technology Choice: Experimental Evidence from Peru," CIRANO Working Papers 2007s-01, CIRANO.
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
This paper has been announced in the following NEP Reports:
- NEP-AGR-2007-10-27 (Agricultural Economics)
- NEP-ALL-2007-10-27 (All new papers)
- NEP-EXP-2007-10-27 (Experimental Economics)
- NEP-INO-2007-10-27 (Innovation)
- NEP-LAM-2007-10-27 (Central & South America)
- NEP-UPT-2007-10-27 (Utility Models & Prospect Theory)
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