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Market Imperfections and Farm Technology Adoption Decisions - A Case Study from the Highlands of Ethiopia

Author

Listed:
  • Yesuf, Mahmud

    () (Environmental Economics Policy Forum for Ethiopia, Ethiopian Development Research Institute)

  • Köhlin, Gunnar

    () (Department of Economics, School of Business, Economics and Law, Göteborg University)

Abstract

This paper investigates the impacts of market and institutional imperfections on technology adoption in a model that considers fertilizer use and soil conservation to be joint decisions. Controlling for plot characteristics and other factors, we found that a household’s decision to adopt fertilizer significantly and negatively depends on whether the same household adopts soil conservation. The reverse causality, however, was insignificant. We also found that outcomes of market imperfections, such as limited access to credit, plot size, risk considerations, and rates-of-time preference, were significant factors in explaining variations in farm technology adoption decisions. Relieving the existing market imperfections will most likely increase the adoption rate of farm technologies.

Suggested Citation

  • Yesuf, Mahmud & Köhlin, Gunnar, 2009. "Market Imperfections and Farm Technology Adoption Decisions - A Case Study from the Highlands of Ethiopia," Working Papers in Economics 403, University of Gothenburg, Department of Economics.
  • Handle: RePEc:hhs:gunwpe:0403
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    File URL: http://hdl.handle.net/2077/21494
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    References listed on IDEAS

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    Cited by:

    1. Andersson, Camilla & Mekonnen, Alemu & Stage, Jesper, 2011. "Impacts of the Productive Safety Net Program in Ethiopia on livestock and tree holdings of rural households," Journal of Development Economics, Elsevier, pages 119-126.
    2. Maurice Ogada & Germano Mwabu & Diana Muchai, 2014. "Farm technology adoption in Kenya: a simultaneous estimation of inorganic fertilizer and improved maize variety adoption decisions," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), pages 1-18.

    More about this item

    Keywords

    Bivariate probit; fertilizer adoption; market imperfections; risk aversion; time preferences; soil conservation;

    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land

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