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Probability Weighting and Input Use Intensity in a State-Contingent Framework

Author

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  • Holden , Stein T.

    (Centre for Land Tenure Studies, Norwegian University of Life Sciences)

  • Quiggin, John

    (School of Economics, University of Queensland)

Abstract

Climate risk represents an increasing threat to poor and vulnerable farmers in drought-prone areas of Africa. This study assesses the fertilizer adoption responses of food insecure farmers in Malawi, where Drought Tolerant (DT) maize was recently introduced. A field experiment, eliciting risk attitudes of farmers, is combined with a detailed farm household survey. A state-contingent production model with rank-dependent utility preferences is estimated. Over-weighting of small probabilities was associated with less use of fertilizer on all maize types and particularly so on the more risky improved maize types.

Suggested Citation

  • Holden , Stein T. & Quiggin, John, 2017. "Probability Weighting and Input Use Intensity in a State-Contingent Framework," CLTS Working Papers 8/17, Norwegian University of Life Sciences, Centre for Land Tenure Studies, revised 21 Oct 2019.
    • Handle: RePEc:hhs:nlsclt:2017_008
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    References listed on IDEAS

    as
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    Cited by:

    1. Holden , Stein T., 2018. "Fertilizer and Sustainable Intensification in Africa," CLTS Working Papers 1/18, Norwegian University of Life Sciences, Centre for Land Tenure Studies, revised 16 Oct 2019.

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    More about this item

    Keywords

    Climate risk; state-contingent production; subjective probability weighting; technology adoption; adaptation; maize; Drought Tolerant maize; fertilizer use;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • 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
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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