“Cursed is the ground because of you”: Religion, Ethnicity, and the Adoption of Fertilizers in Rural Ethiopia

This paper analyses culture as a determinant of technology adoption in a developing country. While the literature extensively discusses the influence of culture upon economic growth, little attention has been paid to the mechanisms that can explain this link at the micro level. In this paper, we postulate that culture may play a crucial role in hindering or fostering the adoption and diffusion of innovation, a key trigger of the engine of growth. We thus borrow from the literature on the economics of innovation, and we model the impact of culture upon households’ decision to adopt innovation. We focus on developing countries and specifically on the adoption of fertilizer in Ethiopian rural areas. This empirical study uses the Ethiopia Rural Household Survey† to attempt to differentiate between individual cultural traits, namely, ethnicity and religion, and the cultural homogeneity of the environment as co-determinants of fertilizer adoption. We thus apply a multivariate survival model for clustered and correlated observations and find a positive effect on the diffusion of fertilizer. Firstly, habits and social norms, proxied by ethnicity, provide a better explanation for the role of culture, than religious beliefs, as usually posited in the literature. Secondly, the cultural environment plays a decisive role. While a homogeneous ethnic environment accelerates the diffusion of fertilizer, a diverse religious background in a community creates an environment conducive to initial adoption. While the direct contribution of this paper relates to technology adoption at the micro level, we believe it represents a first step in gaining a better understanding of the relation between culture and growth at the micro level.