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Leveling with friends: Social networks and Indian farmers' demand for a technology with heterogeneous benefits

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  • Magnan, Nicholas
  • Spielman, David J.
  • Lybbert, Travis J.
  • Gulati, Kajal

Abstract

Agricultural technologies typically spread as farmers learn about profitability through social networks. This process can be nuanced, however, when net returns for some farmers may not be positive. We investigate how social learning influences demand for a resource-conserving technology in eastern Uttar Pradesh, India. We identify potential adopters through an experimental auction and randomly select a subset to adopt. We exploit this variation in adoption across networks to estimate network effects on demand for the technology one year later using a second auction. Technology benefits vary, and network effects are completely conditional on benefits. Having a benefiting adopter in one's network increased demand by over 50%, whereas having a non-benefiting adopter had no effect. These effects are strong enough to bring average demand in line with expected benefits. For many farmers, however, demand remains below the market price, suggesting that network effects will lead to increased—but not rapid widespread—adoption.

Suggested Citation

  • Magnan, Nicholas & Spielman, David J. & Lybbert, Travis J. & Gulati, Kajal, 2015. "Leveling with friends: Social networks and Indian farmers' demand for a technology with heterogeneous benefits," Journal of Development Economics, Elsevier, vol. 116(C), pages 223-251.
  • Handle: RePEc:eee:deveco:v:116:y:2015:i:c:p:223-251
    DOI: 10.1016/j.jdeveco.2015.05.003
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    References listed on IDEAS

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    Cited by:

    1. Elisabeth SADOULET, 2016. "Review of Theories of Learning for Adopting," Working Papers P163, FERDI.
    2. Voors, Maarten & Demont, Matty & Bulte, Erwin, 2016. "New Experiments in Agriculture," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 0(Number 1), pages 1-7, March.
    3. Bruno Wichmann & Minjie Chen & Wiktor Adamowicz, 2016. "Social Networks and Choice Set Formation in Discrete Choice Models," Econometrics, MDPI, Open Access Journal, vol. 4(4), pages 1-26, October.
    4. Wuepper, David & Sauer, Johannes, 2016. "Explaining the performance of contract farming in Ghana: The role of self-efficacy and social capital," Food Policy, Elsevier, vol. 62(C), pages 11-27.
    5. Songsermsawas, Tisorn & Baylis, Kathy & Chhatre, Ashwini & Michelson, Hope, 2016. "Can Peers Improve Agricultural Revenue?," World Development, Elsevier, vol. 83(C), pages 163-178.
    6. Verkaart, Simone & Munyua, Bernard G. & Mausch, Kai & Michler, Jeffrey D., 2017. "Welfare impacts of improved chickpea adoption: A pathway for rural development in Ethiopia?," Food Policy, Elsevier, vol. 66(C), pages 50-61.
    7. Shikuku, K.M., 2018. "Information exchange links, knowledge exposure, and adoption of agricultural technologies in Northern Uganda," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 275974, International Association of Agricultural Economists.

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