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The Effects of Risk and Ambiguity Aversion on Technology Adoption: Evidence from Aquaculture in Ghana

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  • Crentsil, Christian
  • Gschwandtner, Adelina
  • Wahhaj, Zaki

Abstract

We study how aversion to risk and ambiguity aects the adoption of new tech- nologies by Ghanaian smallholder aquafarmers. We conduct a set of eld experiments designed to elicit farmers' risk and ambiguity preferences and combine it with survey- based information on their technology adoption decisions. We nd that aquafarmers who are more risk-averse were quicker to adopt the new technologies: a fast-growing breed of tilapia sh, extruded feed and oating cages. By contrast, ambiguity aversion has no eect on the adoption of the new tilapia breed and extruded feed. Furthermore, it slows down the adoption of oating cages - a technology which entails higher xed costs than the others - and the eect is diminishing in the number of other adopters in the village. We argue that these dierential eects are due to the fact that the technolo- gies are risk-reducing, with potential ambiguity about their payo distributions at the early stages of adoption. The ndings highlight the importance of distinguishing be- tween risk and ambiguity in investigating technology adoption decisions of small-holder farmers in developing countries.

Suggested Citation

  • Crentsil, Christian & Gschwandtner, Adelina & Wahhaj, Zaki, 2018. "The Effects of Risk and Ambiguity Aversion on Technology Adoption: Evidence from Aquaculture in Ghana," 93rd Annual Conference, April 15-17, 2019, Warwick University, Coventry, UK 289575, Agricultural Economics Society - AES.
    • Handle: RePEc:ags:aesc19:289575
    DOI: 10.22004/ag.econ.289575
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    More about this item

    Keywords

    Livestock Production/Industries; Research and Development/Tech Change/Emerging Technologies; Risk and Uncertainty;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services

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