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Fertilizer use and risk: New evidence from Sub-Saharan Africa

Author

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  • Céline Nauges

    (TSE-R - TSE-R Toulouse School of Economics – Recherche - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Douadia Bougherara

    (CEE-M - Centre d'Economie de l'Environnement - Montpellier - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro - Montpellier SupAgro - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement)

  • Estelle Koussoubé

    (LEDA-DIAL - Développement, Institutions et Modialisation - LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

Abstract

Using a large representative dataset of 4,428 maize farmers from Burkina Faso with information on over 7,800 plots, we study the role of risk and farmers' risk preferences in their use of nitrogen fertilizers. After characterizing the role of nitrogen on the moments of the maize yield distribution, we plug the plot-specific distributions into a structural model that allows for both risk preferences and probability distortion to elicit farmers' underlying behavioural model. We found farmers to be only moderately risk averse and to distort probabilities; i.e., farmers overweight the small probabilities of getting high yields. Finally, running simulations, we find that prices are a more important driver of the quantity of nitrogen used on maize plots than farmers' risk preferences. Our results suggest that input subsidy programs in this context, if well implemented, may have the potential to increase fertilizer use.

Suggested Citation

  • Céline Nauges & Douadia Bougherara & Estelle Koussoubé, 2021. "Fertilizer use and risk: New evidence from Sub-Saharan Africa," Working Papers hal-04972041, HAL.
    • Handle: RePEc:hal:wpaper:hal-04972041
    Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-04972041v1
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