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Toward an Understanding of Technology Adoption: Risk, Learning, and Neighborhood Effects

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  • Kenneth A. Baerenklau

Abstract

Agricultural pollution frequently is addressed through economic incentives for adopting alternative management practices. Designing efficient incentives requires understanding technology adoption behavior. This study estimates an adoption model incorporating risk preferences, endogenous learning, and peer-group influence to examine the importance of these behavioral drivers. Results suggest risk preferences and learning are key determinants, and that peer-group influence is less relevant. Thus the impact of a policy may depend more on the ability of the incentive to compensate producers for anticipated losses, and the extent to which information is shared, rather than on the “bandwagon” effect produced by early adopters or targeted incentives.

Suggested Citation

  • Kenneth A. Baerenklau, 2005. "Toward an Understanding of Technology Adoption: Risk, Learning, and Neighborhood Effects," Land Economics, University of Wisconsin Press, vol. 81(1).
  • Handle: RePEc:uwp:landec:v:81:y:2005:i:1:p1-19
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    References listed on IDEAS

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    Cited by:

    1. Joshua D. Detre & Hiroki Uematsu & Ashok K. Mishra, 2011. "The influence of GM crop adoption on the profitability of farms operated by young and beginning farmers," Agricultural Finance Review, Emerald Group Publishing, vol. 71(1), pages 41-61, May.
    2. Xingliang Ma & Guanming Shi, 2015. "A dynamic adoption model with Bayesian learning: an application to U.S. soybean farmers," Agricultural Economics, International Association of Agricultural Economists, vol. 46(1), pages 25-38, January.
    3. Matuschke, Ira, 2008. "Evaluating the impact of social networks in rural innovation systems: An overview," IFPRI discussion papers 816, International Food Policy Research Institute (IFPRI).
    4. Josephson, Anna Leigh & Ricker-Gilbert, Jacob & Florax, Raymond J.G.M., 2014. "How does population density influence agricultural intensification and productivity? Evidence from Ethiopia," Food Policy, Elsevier, vol. 48(C), pages 142-152.
    5. Sauer, Johannes & Zilberman, David D., 2009. "Innovation behaviour at micro level - selection and identification," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt6t49r0fh, Department of Agricultural & Resource Economics, UC Berkeley.
    6. Wollni, Meike & Lee, David R. & Thies, Janice E., 2009. "Effects of Participation in Organic Markets and Farmer-based Organizations on the Adoption of Soil Conservation Practices among Small-scale Farmers in Honduras," 2009 Conference, August 16-22, 2009, Beijing, China 51669, International Association of Agricultural Economists.
    7. Janice A. Hauge & Stanley Chimahusky, 2016. "Are Promises Meaningless In An Uncertain Crowdfunding Environment?," Economic Inquiry, Western Economic Association International, vol. 54(3), pages 1621-1630, July.
    8. Tessema, Yohannis Mulu & Asafu-Adjaye, John & Kassie, Menale & Mallawaarachchi, Thilak, 2016. "Do neighbours matter in technology adoption? The case of conservation tillage in northwest Ethiopia," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 11(3), September.
    9. Yoo, Do-il, "undated". "Farm Heterogeneity in Biotechnology Adoption with Risk and Learning: an Application to U.S. Corn," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170656, Agricultural and Applied Economics Association.
    10. Xiaolong Feng & Mingyue Liu & Xuexi Huo & Wanglin Ma, 2017. "What Motivates Farmers’ Adaptation to Climate Change? The Case of Apple Farmers of Shaanxi in China," Sustainability, MDPI, Open Access Journal, vol. 9(4), pages 1-15, March.
    11. Ihli, Hanna Julia & Musshoff, Oliver, 2013. "Understanding the Investment Behavior of Ugandan Smallholder Farmers: An Experimental Analysis," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150331, Agricultural and Applied Economics Association.
    12. Magnan, Nicholas & Spielman, David J. & Gulati, Kajal, 2013. "Female social networks and learning about a new technology in eastern Uttar Pradesh, India," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150688, Agricultural and Applied Economics Association.
    13. Ma, Xingliang & Shi, Guanming, 2013. "GM vs. Non-GM: A Survival Analysis of U.S. Hybrid Seed Corn," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 42(3), December.
    14. Yoo, Do-il, 2012. "Individual and Social Learning in Bio-technology Adoption: The Case of GM Corn in the U.S," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124975, Agricultural and Applied Economics Association.
    15. Waters, James, 2013. "The influence of information sources on inter- and intra-firm diffusion: evidence from UK farming," MPRA Paper 50955, University Library of Munich, Germany.
    16. Baerenklau, Kenneth A., 2005. "Some Simulation Results for a Green Insurance Mechanism," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 30(01), April.
    17. Ihli, Hanna Julia & Musshoff, Oliver, 2013. "Investment Behavior of Ugandan Smallholder Farmers: An Experimental Analysis," Discussion Papers 154775, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    18. Wollni, Meike & Lee, David R. & Thies, Janice E., 2008. "Effects of participation in organic markets and farmer-based organizations on adoption of soil conservation practices among small-scale farmers in Honduras," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6423, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    19. Elisabetta Magnani & Adeline Tubb, 2012. "Green R&D, Technology Spillovers, and Market Uncertainty: An Empirical Investigation," Land Economics, University of Wisconsin Press, vol. 88(4), pages 685-709.
    20. Oliver Musshoff & Norbert Hirschauer, 2011. "A behavioral economic analysis of bounded rationality in farm financing decisions: First empirical evidence," Agricultural Finance Review, Emerald Group Publishing, vol. 71(1), pages 62-83, May.
    21. Konstantinos Chatzimichael & Dimitris Christopoulos & Spiro Stefanou & Vangelis Tzouvelekas, 2017. "Irrigation Practices, Water Effectiveness and Productivity Measurement," Working Papers 1702, University of Crete, Department of Economics.
    22. Meike Wollni & David R. Lee & Janice E. Thies, 2010. "Conservation agriculture, organic marketing, and collective action in the Honduran hillsides," Agricultural Economics, International Association of Agricultural Economists, vol. 41(3-4), pages 373-384, May.
    23. Muange, Elijah N. & Godecke, Theda & Schwarze, Stefan, 2015. "Effects of social networks on technical efficiency in smallholder agriculture: The case of cereal producers Tanzania," 2015 Conference, August 9-14, 2015, Milan, Italy 230221, International Association of Agricultural Economists.

    More about this item

    JEL classification:

    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices

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