Robert M. La Follette School of Public Affairs

Money matters: The role of yields and profits in agricultural technology adoption

Despite the growing attention to technology adoption in the economics literature, knowledge gaps remain regarding why some valuable technologies are slow to be adopted. 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 pro ts. We nd that farmers' comparative advantage does not play a signi cant 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.

Additional Info

  • Volume or issue no.: La Follette School Working Paper No. 2018-005
  • Author(s): Emilia Tjernstr√∂m, Jeffrey D. Michlera, Simone Verkaart, Kai Mausch