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Heterogeneous returns and the persistence of agricultural technology adoption

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  • Francis Teal
  • Andrew Zeitlin
  • Stefano Caria

Abstract

In this paper we explore whether low rates of sustained technology use can be explained by heterogeneity in returns to adoption.� To do so we evaluate impacts of the Cocoa Abrabopa Association, which provided a package of fertilizer and other inputs on credit to cocoa farmers in Ghana.� High estimated average productive impacts for treated farmers are found to be consistent with negative economic profits for a substantial proportion of the treated population.� By constructing an individual-specific measure of returns, we demonstrate that low realized returns among adopters are associated with low retention rates, even after conditioning on output levels and successful repayment.� The results are consistent with the hypothesis that high average returns mask substantial and persistent heterogeneity, and that farmers experiment in order to learn about their idiosyncratic returns.

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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number CSAE WPS/2010-37.

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Date of creation: 01 Nov 2010
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Handle: RePEc:oxf:wpaper:csae-wps/2010-37

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  1. Conley, T.G. & Udry, C.R., 2000. "Learning about a New Technology: Pineapple in Ghana," Papers 817, Yale - Economic Growth Center.
  2. Dammert, Ana C., 2008. "Heterogeneous Impacts of Conditional Cash Transfers: Evidence from Nicaragua," IZA Discussion Papers 3653, Institute for the Study of Labor (IZA).
  3. Marianne P. Bitler & Jonah B. Gelbach & Hilary W. Hoynes, 2003. "What Mean Impacts Miss: Distributional Effects of Welfare Reform Experiments," Working Papers 109, RAND Corporation Publications Department.
  4. Djebbari, Habiba & Smith, Jeffrey, 2008. "Heterogeneous impacts in PROGRESA," Journal of Econometrics, Elsevier, vol. 145(1-2), pages 64-80, July.
  5. Andrew D. Foster & Mark R. Rosenzweig, 2010. "Microeconomics of Technology Adoption," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 395-424, 09.
  6. James J. Heckman & Salvador Navarro-Lozano, 2003. "Using Matching, Instrumental Variables and Control Functions to Estimate Economic Choice Models," NBER Working Papers 9497, National Bureau of Economic Research, Inc.
  7. Oriana Bandiera & Imran Rasul, 2006. "Social Networks and Technology Adoption in Northern Mozambique," Economic Journal, Royal Economic Society, vol. 116(514), pages 869-902, October.
  8. Esther Duflo & Michael Kremer & Jonathan Robinson, 2009. "Nudging Farmers to Use Fertilizer: Theory and Experimental Evidence from Kenya," NBER Working Papers 15131, National Bureau of Economic Research, Inc.
  9. Boyan Jovanovic & Yaw Nyarko, 1994. "Learning By Doing and the Choice of Technology," NBER Working Papers 4739, National Bureau of Economic Research, Inc.
  10. Heckman, James J & Smith, Jeffrey, 1997. "Making the Most Out of Programme Evaluations and Social Experiments: Accounting for Heterogeneity in Programme Impacts," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 487-535, October.
  11. 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.
  12. 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.
  13. Moser, Christine M. & Barrett, Christopher B., 2003. "The Complex Dynamics Of Smallholder Technology Adoption: The Case Of Sri In Madagascar," Working Papers 14735, Cornell University, Department of Applied Economics and Management.
  14. Erica Field, 2005. "Property Rights and Investment in Urban Slums," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 279-290, 04/05.
  15. Mark Rosenzweig & Andrew D. Foster, . "Learning by Doing and Learning from Others: Human Capital and Technical Change in Agriculture," Home Pages _068, University of Pennsylvania.
  16. Field, Erica Marie, 2005. "Property Rights and Investment in Urban Slums," Scholarly Articles 3634150, Harvard University Department of Economics.
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Cited by:
  1. Negash, Martha, 2012. "Biofuels and Food Security: Micro-evidence from Ethiopia," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126793, International Association of Agricultural Economists.
  2. Tomoya Matsumoto, 2013. "Disseminating New Farming Practices among Small Scale Farmers: An Experimental Intervention in Uganda," GRIPS Discussion Papers 13-18, National Graduate Institute for Policy Studies.
  3. Caria, A. Stefano & Tamru, Seneshaw & Bizuneh, Gera, 2011. "Food security without food transfers?: A CGE analysis for Ethiopia of the different food security impacts of fertilizer subsidies and locally sourced food transfers," IFPRI discussion papers 1106, International Food Policy Research Institute (IFPRI).
  4. Caria, A. Stefano & Tamru, Seneshaw & Bizuneh, Gera, 2011. "Food security without food transfers?: A CGE analysis for Ethiopia of the different food security impacts of fertilizer subsidies and locally sourced food transfers," ESSP working papers 29, International Food Policy Research Institute (IFPRI).

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