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The Value of Information in Technology Adoption

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  • Islam, Asadul

    (Monash University)

  • Ushchev, Philip

    (Higher School of Economics (HSE))

  • Zenou, Yves

    (Monash University)

  • Zhang, Xin

    (Beijing Normal University)

Abstract

We develop a theoretical model in which technology adoption decisions are based on the information received from others about the quality of a new technology and on their risk attitudes. We test the predictions of this model using a randomized field experiment in Bangladesh. We show that the share of treated farmers who receive better training in System of Rice Intensification (SRI) technology have a high positive impact on the adoption rate of untreated farmers. We also find that untreated farmers who are more risk-averse tend to adopt the technology less and are less influenced by their treated peers. Finally, a trained farmer's impact on his untrained peers increases if he himself adopts SRI technology. Our results indicate that the crucial determinants of technology adoption for untreated farmers are the accuracy and reliability of information transmission about the quality of the technology circulated among farmers as well as their degree of risk aversion.

Suggested Citation

  • Islam, Asadul & Ushchev, Philip & Zenou, Yves & Zhang, Xin, 2019. "The Value of Information in Technology Adoption," IZA Discussion Papers 12672, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp12672
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    1. Wanglin Ma & Xiaobing Wang, 2020. "Internet Use, Sustainable Agricultural Practices and Rural Incomes: Evidence from China," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(4), pages 1087-1112, October.

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    More about this item

    Keywords

    Bayesian model; technology adoption; peers; risk attitude; RCT; Bangladesh;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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