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Money Matters: The Role of Yields and Profits in Agricultural Technology Adoption

OAR@ICRISAT

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Relation http://oar.icrisat.org/10806/
http://dx.doi.org/10.1093/ajae/aay050
10.1093/ajae/aay050
 
Title Money Matters: The Role of Yields and Profits in Agricultural Technology Adoption
 
Creator Michler, J D
Tjernström, E
Verkaart, S
Mausch, K
 
Subject Agriculture-Farming, Production, Technology, Economics
 
Description Despite the growing attention to technology adoption in the economics literature, knowledge gaps remain regarding why some valuable technologies are rapidly adopted, while others are not. This paper contributes to our understanding of agricultural technology adoption by showing that a focus on yield gains may, in some contexts, be misguided. We study a technology in Ethiopia that has no impact on yields, but that has nonetheless been widely adopted. Using three waves of panel data, we estimate a correlated random coefficient model and calculate the returns to improved chickpea in terms of yields, costs, and profits. We find that farmers’ comparative advantage does not play a significant role in their adoption decisions and hypothesize that this is due to the overall high economic returns to adoption, despite the limited yield impacts of the technology. Our results suggest economic measures of returns may be more relevant than increases in yields in explaining technology adoption decisions.
 
Publisher Oxford University Press
 
Date 2018-07
 
Type Article
PeerReviewed
 
Format application/pdf
 
Language en
 
Rights —
 
Identifier http://oar.icrisat.org/10806/1/MONEY%20MATTERS.pdf
Michler, J D and Tjernström, E and Verkaart, S and Mausch, K (2018) Money Matters: The Role of Yields and Profits in Agricultural Technology Adoption. American Journal of Agricultural Economics (TSI). pp. 1-22. ISSN 0002-9092