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Money Matters: The Role of Yields and Profits in Agricultural Technology Adoption


  • Jeffrey D Michler
  • Emilia Tjernström
  • Simone Verkaart
  • Kai Mausch


Despite the growing attention to technology adoption in the economics literature, knowledge gaps remain regarding why some valuable technologies are rapidly adopted, while others are not. This paper contributes to our understanding of agricultural technology adoption by showing that a focus on yield gains may, in some contexts, be misguided. We study a technology in Ethiopia that has no impact on yields, but that has nonetheless been widely adopted. Using three waves of panel data, we estimate a correlated random coefficient model and calculate the returns to improved chickpea in terms of yields, costs, and profits. We find that farmers’ comparative advantage does not play a significant role in their adoption decisions and hypothesize that this is due to the overall high economic returns to adoption, despite the limited yield impacts of the technology. Our results suggest economic measures of returns may be more relevant than increases in yields in explaining technology adoption decisions.

Suggested Citation

  • Jeffrey D Michler & Emilia Tjernström & Simone Verkaart & Kai Mausch, 2019. "Money Matters: The Role of Yields and Profits in Agricultural Technology Adoption," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 101(3), pages 710-731.
  • Handle: RePEc:oup:ajagec:v:101:y:2019:i:3:p:710-731.

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    14. Martin Paul Jr Tabe-Ojong & Jourdain C. Lokossou & Bisrat Gebrekidan & Hippolyte D. Affognon, 2023. "Adoption of climate-resilient groundnut varieties increases agricultural production, consumption, and smallholder commercialization in West Africa," Nature Communications, Nature, vol. 14(1), pages 1-11, December.
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    17. Martin Paul & Kai Mausch & Tesfaye B Woldeyohanes & Thomas Heckelei, 2022. "Three hurdles towards commercialisation: integrating subsistence chickpea producers in the market economy," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 49(3), pages 668-695.
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    20. Chowdhury, Shyamal & Smits, Joeri & Sun, Qigang, 2020. "Contract Structure, Time Preference, and Technology Adoption," IZA Discussion Papers 13590, Institute of Labor Economics (IZA).
    21. Fiona Burlig & Andrew W. Stevens, 2024. "Social networks and technology adoption: Evidence from church mergers in the U.S. Midwest," American Journal of Agricultural Economics, John Wiley & Sons, vol. 106(3), pages 1141-1166, May.
    22. Wiredu, Alexander Nimo & Manda, Julius & Feleke, Shiferaw & Asante, Bright Owusu & Savala, Canon Engoke & Kyei-Boahen, Stephen & Manyong, Victor & Alene, Arega, 2021. "Impacts of Quality Seeds of Improved Legume Varieties on Incomes and Poverty in Mozambique: An Ordered Choice Endogenous Switching Regression Analysis," 2021 Conference, August 17-31, 2021, Virtual 315294, International Association of Agricultural Economists.
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    24. Pieter Rutsaert & Jordan Chamberlin & Kevin Ong’are Oluoch & Victor Ochieng Kitoto & Jason Donovan, 2021. "The geography of agricultural input markets in rural Tanzania," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 13(6), pages 1379-1391, December.
    25. Islam, Md Saiful & Rahman, Mohammad Chhiddikur & Haque, Md Enamul & Rahaman, Md Shajedur & Omar, Md Imran & Sarkar, Md A R & Islam, Mohammad A, 2023. "Cultivation of Local Rice Varieties in Bangladesh: Assessing the Farm Level Determinants," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 21(1), pages 46-56.


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