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The Effect of Production Uncertainty and Information Dissemination of the Diffusion of Irrigation Technologies

  • Koundouri, Phoebe
  • Nauges, Céline
  • Tzouvelekas, Vangelis

In this paper we study the diffusion of modern irrigation technologies among a population of farmers, with a particular focus on risk and information dissemination through network and imitation effects. The major contribution of our work is to extend the traditional (theoretical) model of diffusion to account for production risk and the value of information about the new technology. This model is then applied to a sample of 385 farms located in Crete, Greece, to describe diffusion of modern irrigation technologies. Our results indicate that risk aversion plays a significant role and that farmers who are more sensitive to the risk of extreme events will adopt the modern irrigation technology earlier. Knowledge, experience and information dissemination are found to reduce time before adoption of the new technology, while farmers tend to learn more from and/or imitate farmers that are homophylic to them with respect to their education level, age and farm specialization.

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Paper provided by Toulouse School of Economics (TSE) in its series TSE Working Papers with number 09-032.

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Date of creation: Apr 2009
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Handle: RePEc:tse:wpaper:22145
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