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The different effects of risk preferences on the adoption of agricultural technology: evidence from a rural area in Cambodia

Author

Listed:
  • Daichi Shimamoto

    () (Graduate School of Economics, Osaka University, Japan. Research Fellow, Japan Society for the Promotion of Science, Japan)

  • Hiroyuki Yamada

    () (Osaka School of International Public Policy, Osaka University, Japan)

  • Ayako Wakano

    () (Graduate School of Economics, Osaka University, Japan)

Abstract

This paper investigates how farmers f risk attitudes affected the adoption of agricultural technology in a rural area in Cambodia. We incorporated prospect theory to farmers f utility function and examined the effect of the risk attitude of farmers to the adoption of two technologies: adoption of a moisture meter for measuring the moisture content of seeds, a recently introduced post-harvest technology, and a modern rice variety that was introduced in the 1990s. The results indicated that farmers overweighted a small probability and risk averse farmers adopted a moisture meter to measure the moisture contents of seeds significantly. With respect to the modern rice variety, farmers f risk attitude did not affect the adoption. Our results and the results of a previous study imply that the type of risk and uncertainty faced by farmers at the time of decision-making of its adoption partly determine the effect of risk attitude on agricultural adoption.

Suggested Citation

  • Daichi Shimamoto & Hiroyuki Yamada & Ayako Wakano, 2014. "The different effects of risk preferences on the adoption of agricultural technology: evidence from a rural area in Cambodia," Discussion Papers in Economics and Business 14-07, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  • Handle: RePEc:osk:wpaper:1407
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    Keywords

    technology adoption; risk preferences; prospect theory;

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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