The Role of Production Risk in Sustainable Land-Management Technology Adoption in the Ethiopian Highlands
AbstractThis paper provides empirical evidence of production risk impact on sustainable land- management technology adoption, using two years of cross-sectional plot-level data collected in the Ethiopian highlands. We used a moment-based approach, which allowed a flexible representation of the production risk (Antle 1983, 1987). Mundlak’s approach was used to capture the unobserved heterogeneity along with other regressors in the estimation of fertilizer and conservation adoption. The empirical results revealed that impact of production risk varied by technology type. Production risks (variance and crop failure as measured by second and third central moments, respectively) had significant impact on fertilizer adoption and extent of adoption. However, this impact was not observed in adoption of conservation technology. On the other hand, expected return (as measured by the first central moment) had a positive significant impact on both fertilizer (adoption and intensity) and conservation adoption. Economic instruments that hedge against risk exposure, including downside risk and increase productivity, are important to promote adoption of improved technology and reduce poverty in Ethiopia.
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 Resources For the Future in its series Discussion Papers with number dp-08-15-efd.
Date of creation: 03 Apr 2008
Date of revision:
Production risk; sustainable land management technology adoption; moment based estimation; Ethiopia;
Other versions of this item:
- Kassie, Menale & Yesuf, Mahmud & Köhlin, Gunnar, 2009. "The Role of Production Risk in Sustainable Land-Management Technology Adoption in the Ethiopian Highlands," Working Papers in Economics 407, University of Gothenburg, Department of Economics.
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
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.:
- John Pender & Marcel Fafchamps, 2006. "Land Lease Markets and Agricultural Efficiency in Ethiopia," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 15(2), pages 251-284, June.
- Suleiman Abrar & Oliver Morrissey & Tony Rayner, 2004. "Crop-Level Supply Response by Agro-Climatic Region in Ethiopia," Journal of Agricultural Economics, Wiley Blackwell, vol. 55(2), pages 289-311.
- Antle, John M, 1983. "Testing the Stochastic Structure of Production: A Flexible Moment-based Approach," Journal of Business & Economic Statistics, American Statistical Association, vol. 1(3), pages 192-201, July.
- Robalino, Juan A. & Pfaff, Alexander, 2012. "Contagious development: Neighbor interactions in deforestation," Journal of Development Economics, Elsevier, vol. 97(2), pages 427-436.
- Pfaff, Alexander S. P. & Sanchez-Azofeifa, G. Arturo, 2004. "Deforestation pressure and biological reserve planning: a conceptual approach and an illustrative application for Costa Rica," Resource and Energy Economics, Elsevier, vol. 26(2), pages 237-254, June.
- 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, vol. 88(3), pages 657-670.
- Koundouri, Phoebe & Nauges, Céline & Tzouvelekas, Vangelis, 2006. "Technology Adoption under Production Uncertainty: Theory and Application to Irrigation Technology," Open Access publications from University of Toulouse 1 Capitole http://neeo.univ-tlse1.fr, University of Toulouse 1 Capitole.
- Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
- Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-44, September.
- Shiferaw, Bekele & Holden, Stein T., 1998. "Resource degradation and adoption of land conservation technologies in the Ethiopian Highlands: A case study in Andit Tid, North Shewa," Agricultural Economics, Blackwell, vol. 18(3), pages 233-247, May.
- Lin, Tsai-Fen & Schmidt, Peter, 1984. "A Test of the Tobit Specification against an Alternative Suggested by Cragg," The Review of Economics and Statistics, MIT Press, vol. 66(1), pages 174-77, February.
- Yesuf, Mahmud & Kassie, Menale & Köhlin, Gunnar, 2009.
"Risk Implications of Farm Technology Adoption in the Ethiopian Highlands,"
Working Papers in Economics
404, University of Gothenburg, Department of Economics.
- Yesuf, Mahmud & Kassie, Menale & Köhlin, Gunnar, 2009. "Risk Implications of Farm Technology Adoption in the Ethiopian Highlands," Discussion Papers dp-09-13-efd, Resources For the Future.
- Kassie, Menale & Zikhali, Precious & Manjur, Kebede & Edwards, Sue, 2008. "Adoption of Organic Farming Technologies: Evidence from Semi-Arid Regions of Ethiopia," Working Papers in Economics 335, University of Gothenburg, Department of Economics.
- Persson, U. Martin & Alpizar, Francisco, 2011. "Conditional Cash Transfers and Payments for Environmental Services: A Conceptual Framework for Explaining and Judging Differences in Outcomes," Discussion Papers dp-11-06-efd, Resources For the Future.
- Ogada, Maurice Juma & Nyangena, Wilfred & Yesuf, Mahmud, 2010. "Production risk and farm technology adoption in the rain-fed semi-arid lands of Kenya," Journal of Cooperatives, NCERA-210, vol. 4(2), June.
- Juma, Maurice & Nyangena, Wilfred & Yesuf, Mahmud, 2090. "Production Risk and Farm Technology Adoption in Rain-Fed, Semi-Arid Lands of Kenya," Discussion Papers dp-09-22-efd, Resources For the Future.
- Kassie, Menale & Zikhali, Precious & Pender, John & Köhlin, Gunnar, 2008. "Organic Farming Technologies and Agricultural Productivity: The case of Semi-Arid Ethiopia," Working Papers in Economics 334, University of Gothenburg, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Webmaster).
If references are entirely missing, you can add them using this form.