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Heterogeneous returns and the persistence of agricultural technology adoption

  • Francis Teal
  • Andrew Zeitlin
  • Stefano Caria

In this paper we explore whether low rates of sustained technology use can be explained by heterogeneity in returns to adoption.� To do so we evaluate impacts of the Cocoa Abrabopa Association, which provided a package of fertilizer and other inputs on credit to cocoa farmers in Ghana.� High estimated average productive impacts for treated farmers are found to be consistent with negative economic profits for a substantial proportion of the treated population.� By constructing an individual-specific measure of returns, we demonstrate that low realized returns among adopters are associated with low retention rates, even after conditioning on output levels and successful repayment.� The results are consistent with the hypothesis that high average returns mask substantial and persistent heterogeneity, and that farmers experiment in order to learn about their idiosyncratic returns.

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File URL: http://www.csae.ox.ac.uk/workingpapers/pdfs/2010-37text.pdf
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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number CSAE WPS/2010-37.

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Date of creation: 01 Nov 2010
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Handle: RePEc:oxf:wpaper:csae-wps/2010-37
Contact details of provider: Postal: Manor Rd. Building, Oxford, OX1 3UQ
Web page: http://www.economics.ox.ac.uk/
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  3. Bandiera, Oriana & Rasul, Imran, 2002. "Social Networks and Technology Adoption in Northern Mozambique," CEPR Discussion Papers 3341, C.E.P.R. Discussion Papers.
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  7. Timothy G. Conley & Christopher R. Udry, 2005. "Learning about a new technology: pineapple in Ghana," Proceedings, Federal Reserve Bank of San Francisco.
  8. Andrew D. Foster & Mark R. Rosenzweig, 2010. "Microeconomics of Technology Adoption," Working Papers 984, Economic Growth Center, Yale University.
  9. Boyan Jovanovic & Yaw Nyarko, 1994. "Learning By Doing and the Choice of Technology," NBER Working Papers 4739, National Bureau of Economic Research, Inc.
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  11. Esther Duflo & Michael Kremer & Jonathan Robinson, 2009. "Nudging Farmers to Use Fertilizer: Theory and Experimental Evidence from Kenya," NBER Working Papers 15131, National Bureau of Economic Research, Inc.
  12. Erica Field, 2005. "Property Rights and Investment in Urban Slums," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 279-290, 04/05.
  13. Foster, Andrew D. & Rosenzweig, Mark R., 2010. "Microeconomics of Technology Adoption," Working Papers 78, Yale University, Department of Economics.
  14. Heckman, James J & Smith, Jeffrey, 1997. "Making the Most Out of Programme Evaluations and Social Experiments: Accounting for Heterogeneity in Programme Impacts," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 487-535, October.
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  17. Esther Duflo & Michael Kremer & Jonathan Robinson, 2008. "How High Are Rates of Return to Fertilizer? Evidence from Field Experiments in Kenya," American Economic Review, American Economic Association, vol. 98(2), pages 482-88, May.
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