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The Value of Information in Technology Adoption: Theory and Evidence from Bangladesh

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  • Islam, Asadul
  • Ushchev, Philip
  • Zenou, Yves
  • Zhang, Xin

Abstract

We develop a theoretical model in which adoption decisions are based on information received from others about the quality of a new technology and on their risk attitude. We test the predictions of this model using a field experiment in Bangladesh. We show that treated farmers who receive better training in System of Rice Intensification (SRI) technology have more accurate information about this technology, and have a higher impact on the adoption rate of untreated farmers. We also find that untreated farmers that are more risk-averse tend to adopt less and are less influenced by their treated peers. Finally, a trained farmers' impact on his untrained peers increases if he himself adopts SRI technology. Our results indicate that the crucial determinant of technology adoption for untreated farmers is their degree of risk aversion and the accuracy and reliability of information transmission about the quality of technology circulated among farmers.

Suggested Citation

  • Islam, Asadul & Ushchev, Philip & Zenou, Yves & Zhang, Xin, 2018. "The Value of Information in Technology Adoption: Theory and Evidence from Bangladesh," CEPR Discussion Papers 13419, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:13419
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    More about this item

    Keywords

    randomized controlled trial (RCT); risk attitude; Technology adoption;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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