technology adoption under production uncertainty theory and application to irrigation technology we propose a theoretical framework to analyze the conditions under which a farmer facing production uncertainty due to a possible water shortage and incomplete information will adopt a more efficient irrigation technology a reduced form of this model is empirically estimated using a sample of 265 farms located in crete greece the empirical results suggest that farmers choose to adopt the new technology in order to hedge against production risk in addition we show that the farmer s human capital also plays a significant role in the decision to adopt modern more efficient irrigation equipment

profits and politics coordinating technology adoption in agriculture abstract this paper examines the political economy of government led coordination of economic activity in a simple two sector model in which individuals choice of agricultural technology affects industrialization we demonstrate the existence of multiple equilibria the economy is either characterized by the use of a traditional agricultural technology and a low level of industrialization or the use of a mechanized technology and a high level of industrialization relative to the traditional technology use of the mechanized technology increases output but leaves some population groups worse off we show that the distributional implications of choosing the mechanized technology restrict the possibility of pareto improving coordination by an elected policy maker even when we allow for income redistribution

household level determinants of adoption of improved natural resources management practices among smallholder farmers in western kenya abstract integrated natural resources management inrm of which integrated soil fertility management isfm is a component offers considerable promise for increasing food production in kenya it nonetheless remains unclear whether isfm inrm techniques lend themselves easily to adoption by smallholder farmers using panel data collected in western kenya in 1989 and 2002 this study finds that resource constraints limit many farmers adoption of isfm inrm techniques the size of the farm owned by a household the value of its livestock off farm income family labor supply and the educational attainment and gender of the household head all had a significant positive effect on the likelihood of adoption similar factors were found to be statistically significant in discouraging abandonment of the practices under study there thus seem to exist reinforcing feedback between investments in soil fertility management and household wealth as measured by asset endowments our findings raise important questions as to whether isfm and related techniques are really affordable to poorer smallholder farmers

sales practice and market evolution the case of virtual reality abstract this paper analyses how sales practices of industry pioneers influence the evolution of a new market with particular reference to the case of virtual reality vr in the underlying diffusion process the probability of a new user adopting this technology depends on the quality of experience enjoyed by existing users good sales practice is expensive but leads to a high proportion of satisfied users which is good for subsequent diffusion while suppliers may be tempted to hype up the technology to obtain additional sales in the short term those customers persuaded by hype are often dissatisfied with their experiences and that is bad for diffusion in the longer term the paper draws on a detailed study of the selling process in vr to develop a simulation model which is used to explore how sales practice influences adoption decisions customer satisfaction and the ultimate evolution of the market

social networks and technology adoption in northern mozambique despite their potentially strong impact on poverty agricultural innovations are often adopted slowly using a unique household dataset on sunflower adoption in mozambique we analyse whether and how individual adoption decisions depend upon the choices of others in the same social networks since farmers anticipate that they will share information with others we expect farmers to be more likely to adopt when they know many other adopters dynamic considerations however suggest that farmers who know many adopters might strategically delay adoption to free ride on the information gathered by others we present empirical evidence that shows that the relationship between the probability of adoption and the number of known adopters is shaped as an inverse u in line with information sharing the network effect is stronger for farmers who report discussing agriculture with others the data contains information which is needed to ameliorate the identification issues that commonly arise in this context in particular social networks are precisely identified and in addition we can control for village heterogeneity and endogenous group formation

costs and benefits of preserving farm animal genetic resources from extinction cvm and bio economic model for valuing a conservation program for the italian pentro horse abstract this paper presents the results of a cost benefit analysis of a conservation program for the pentro horse this horse breed has been reared for millennia in a southern italian wetland where it is now strongly tied to the traditions of the region but presently faces extinction as only 150 horses have survived horse herds live in a wild state characterising in a remarkable manner the landscape of the wetland this results in a flow of social benefits that the market value of this breed fails to capture the benefits from a conservation program for this currently unprotected local breed is estimated in a contingent valuation study while a bio economic model is used to estimate the costs associated with its in situ conservation the results show that the benefit cost ratio is in the worst scenario equal to 1 67 thus justifying a conservation policy this combined approach could be useful to support policy making for conservation in regions with a long history of breeding domestic animals

alcohol consumption and human capital a retrospective study of the literature grossman proposed an individual s health can be viewed as one aspect of their human capital following this line of thought a number of recent papers have reported a positive impact of alcohol consumption on earnings the rationale for the existence of such a relationship is the positive impact of alcohol on physical and mental health we conduct a meta analysis to determine whether such factors as the estimation technique the presence of ex drinkers in the sample possible sample selection bias and publication bias may all contribute to these findings an additional suggestion for the positive relationship between alcohol and wages is the presence of a common set of personality traits that determines drinking behaviour and also leads to higher earnings we examine this relationship by reviewing the literature that investigates if the personality influencing aspects of alcohol consumption influences measures of human capital we also survey the significant body of research that has examined how alcohol consumption has been found to influence educational outcomes and the work force participation of problem drinkers

the estimation of human capital by administrative archives in a static and longitudinal perspective the case of milan this paper focuses on the estimation of the latent variable human capital hc at disaggregated level worker by available routinely institutional data flows in particular we utilize the lombardy region administrative archive employment centers of the province of milan collecting information about careers of workers in the private sector of the milan area and administrative flows collecting mandatory workers individual income tax returns filed with the national internal revenue service first we propose and empirically estimate hc scores in a static referred to 2004 framework by means of a realistic measurement model within causal relationships among endogenous and exogenous investment hc indicators furthermore the model also specifies a set of concomitant indicators that not belonging to hc investment indicators have causal impact on endogenous variables and on hc scores too second we propose a longitudinal analysis period 2000 2004 aimed to investigate how workers earned income growth rates vary over workers educational levels and other personal characteristics the empirical results of both analyses confirm the characteristics of the italian job market denoted by marked inequalities and knowledge regarding the process of school to work transition characterized by a weak incidence of education on longitudinal trajectories of earned income

one and one half bound dichotomous choice contingent valuation to reduce the potential for response bias on the follow up bid in multiple bound discrete choice cvm questions while maintaining much of the efficiency gains of the multiple bound approach we introduce the one and one half bound oohb approach despite the fact that the oohb model uses less information than the double bound db approach efficiency gains in moving from single bound to oohb capture a large portion of the gain associated with moving from single bound to db in an analysis of survey data our oohb estimates demonstrated higher consistency with respect to the follow up data than the db estimates and were more efficient as well

knowledge diffusion and modernization of rural industrial clusters a paper manufacturing village in northern vietnam summary this article tests the role of social learning in the modernization of a rural nonfarm industry using data from a paper manufacturing village that was transformed from a traditional handicraft industry into a modern industrial cluster knowledge diffusion through kinship networks is shown to have played a significant role in the dissemination of mechanized production by helping the followers to overcome subjective risk during the initial investment stage the financial support through kinship networks also had a demonstrably positive impact on the diffusion of the technology which removed financial constraints on the initial fixed investments

an employment guarantee as risk insurance assessing the effects of the nregs on agricultural production decisions uninsured risk constrains households in their production decisions in many developing countries similarly to crop insurance employment guarantees can support farmers in managing agricultural production risks evidence from representative panel data of andhra pradesh india suggests that the national rural employment guarantee scheme nregs reduces households uncertainty about future income streams because it provides employment opportunities in rural areas independently of weather shocks and crop failure because the nregs makes an ex post labor supply response to agricultural shocks more efficient households with access to the nregs can shift their production towards riskier but also more profitable crops the observed shifts in agricultural production do considerably raise the profitability of agricultural production and hence the incomes of smallholder farmers the findings are not driven by changes in the labor or cost intensity of those crops which supports the idea that the causal mechanism underlying the observed changes is indeed an insurance effect

influence of social learning on exchange rate policy in developing countries a preliminary finding by using a suitable econometric model this study shows that beyond factors postulated by theorists social learning is a very powerful phenomenon for guiding developing countries in their exchange rate policy we introduce two variables that fairly encapsulate features of learning among neighbours the new variables together with those advanced in theory are then used to determine choice of a managed float by analysing 1993 cross section data from asian developing countries

microcredit and adjustment to environmental shock evidence from the great famine in ireland the great famine of ireland from 1845 to 51 ranks as one of the most lethal of all time claiming approximately one eighth of the country s population utilizing famine relief commission reports to develop a micro level dataset of blight severity i find that in the short run districts more severely infected by blight experienced larger population declines and accumulations of buffer livestock by small to medium sized farms in the medium and long runs however worse affected districts experienced greater substitutions toward other tillage crops and grazing livestock particularly by small to medium sized farms using annual reports of the irish loan funds i further find that access to microfinance credit was an important factor in non demographic adjustment to blight worse affected districts with at least one microfinance fund during the famine experienced substantially smaller relative population declines and larger relative increases in buffer livestock during and immediately after the famine and greater relative medium and long run substitutions toward other crops and grazing livestock than worse affected districts without a fund

agricultural outputs and conflict displacement evidence from a policy intervention in rwanda abstract in 1997 rwanda introduced a resettlement policy for refugees displaced during previous conflicts i exploit geographic variation in the speed of implementation of this policy to investigate the impact of conflict induced displacement and the resettlement policy on household agricultural output and on skill spillover mechanisms between returnees and stayers i find that returns to on farm labor are higher for returnees relative to stayers although the evidence suggests that the policy contributed little additional effect to this differential more speculatively these differentials suggest that upon return from conflict induced exile returnees are more motivated to increase their economic performance

can product demonstrations create markets for sustainable energy technology a randomized controlled trial in rural india abstract the literature on sustainable energy technology sees informational barriers as a major obstacle to technology adoption in the case of solar home systems recent studies report positive socio economic effects on households but technology adoption remains underwhelming in collaboration with a local solar technology provider we conduct a randomized controlled trial in 75 large villages in the state of uttar pradesh india to examine the ability of village solar demonstrations to create markets for solar home systems we find no effect of such demonstrations on technology sales awareness or perceptions of solar technology technology adopters report high levels of satisfaction with product quality and service suggesting that the null finding cannot be attributed to poor technology these findings suggest that lack of awareness is not a binding constraint on the growth of solar technology markets in the study area based on additional surveys we find evidence suggesting that access to credit from rural banks is an important explanation for variation in sales across villages these results do not prove that information and awareness are irrelevant in general but they show that even carefully designed marketing campaigns cannot increase demand for new products in the presence of a binding credit constraint

information flows and social externalities in a tanzanian banana growing village this article analyses the role of social networks as facilitators of information flows and banana output increase based on a village census full information is available on the socio economic characteristics and banana production of farmers kinship group members neighbours and informal insurance group members the census data enable us to use individual specific reference groups and include exogenous group controls to tackle standard difficulties related to identification and omitted variables bias when analysing social effects for the survey village of nyakatoke in tanzania the results suggest that information flows exist within all types of groups analysed but output externalities are limited to kinship groups using networks may offer scope for effective information flows on agricultural techniques but our evidence suggests that not just any local network will have a social externality impact requiring a clear understanding of local social networks for maximum impact

loss aversion and the demand for index insurance abstract this work analyzes if reference dependence and loss aversion can explain the puzzling low adoption rates of rainfall index insurance we present a model that predicts the impact of loss aversion on index insurance demand to vary with different levels of insurance understanding index insurance demand of farmers who are unaware of the loss hedging benefit that insurance provides decreases with loss aversion in contrast insurance demand of farmers who are aware of the loss hedging benefit increases with loss aversion the model further predicts that farmers who are unaware of the loss hedging benefit will not demand an even highly subsidized index insurance using data from a randomized controlled trial involving a sample of indian farmers we provide empirical support for our core conjecture that insurance understanding mitigates the negative impact of loss aversion on index insurance adoption

adoption of agricultural innovations in developing countries a survey this paper reviews various studies which have provided a description and possible explanation to patterns of innovation adoption in the agricultural sector the survey points out that the tendency of many studies to consider innovation adoption in dichotomous terms adoption nonadoption may not be appropriate in many cases where the actual decisions are defined over a more continuous range more attention needs to be given to the socio cultural and institutional environment in area studies so that their interrelation with economic factors affecting adoption can be inferred the presence of several interrelated innovations is another aspect that needs to be considered more carefully in future research since a number of simultaneous decisions may be involved furthermore the possibility of regular sequential patterns in adopting components of a new technological package should be specifically addressed in future studies finally the impact of differential adoption rates on land holding distribution merits attention in future research

selective trials a principal agent approach to randomized controlled experiments we study the design of randomized controlled experiments when outcomes are significantly affected by experimental subjects unobserved effort expenditure while standard randomized controlled trials rcts are internally consistent the unobservability of effort compromises external validity we approach trial design as a principal agent problem and show that natural extensions of rcts which we call selective trials can help improve external validity in particular selective trials can disentangle the effects of treatment effort and the interaction of treatment and effort moreover they can help identify when treatment effects are affected by erroneous beliefs and inappropriate effort expenditure

consumer and citizen roles and motives in the valuation of agricultural genetic resources in finland this study analysed consumer and citizen roles in contingent valuation of a conservation programme of agricultural genetic resources and a native breed product the willingness to pay wtp for the conservation programme 48 was mainly driven by perceived taxpayer responsibility and existence and use motives while the wtp for the product price premium of 14 was to a larger extent associated with perceived purchaser responsibility we identified four respondent groups those who emphasized citizens or consumers roles indifferent and negative which differed in terms of their conservation motivations responsibility perceptions and wtp furthermore the results emphasize that citizen and consumer roles overlap and individuals may act as either or both in the context of a purchasing decision and a taxpayers decision of policy support although the conservation programme received more support future conservation could partly be based on the consumption of specialty products

developing agricultural markets in sub saharan africa organic cocoa in rural uganda abstract this article investigates the process of development in a traditional african export market focusing on a contract farming scheme for organic cocoa in rural uganda based on a repeated household survey we measure the impact of the scheme on the income of participants and the economic mechanisms behind these effects we find substantial benefits from the scheme driven primarily by the establishment of credible incentives for farmers to adopt technologies which improve cocoa quality there is also evidence of broader trends of market deepening and increased productivity probably due to positive spillovers

the value of adaption climate change and timberland management abstract adaptation to exogenous change occurs on both intensive and extensive margins whether and how one accounts for human adaptation directly affects estimates of the economic consequences of environmental change estimates that are both critical in informing policy decisions and notoriously difficult to value this paper introduces and applies an analytical framework for placing an economic value on adaptation we explore the issue first in a stylized model that facilitates making concrete generalizations about the kinds of adaptations that generate high or low economic value we then test the soundness of our insights by incorporating learning and adaptive decision making into a structural dynamic forestry model where climate change is imposed exogenously and agents respond optimally using downscaled climate projections integrated with site and species specific timber productivity data we estimate the economic value of adaptation to climate change within the california timber industry we find on the intensive margin changing the rotation intervals will yield a low value of adaptation but on the extensive margin replanting more suitable tree species can yield significant value

agricultural technology choice and transport this paper addresses an old and recurring theme in development economics the slow adoption of new technologies by farmers in many developing countries the paper explores a somewhat novel link to explain this puzzle the link between market access and the incentives to adopt a new technology when there are non convexities the paper develops a theoretical model to guide the empirical analysis which uses spatially disaggregated agricultural production data from spatial production allocation model and living standards measurement study survey data for nigeria the model is used to estimate the impact of transport costs on crop production the adoption of modern technologies and the differential impact on returns of modern versus traditional farmers to overcome the limitation of data availability on travel costs for much of africa road survey data are combined with geographic information road network data to generate the most thorough and accurate road network available with these data and the highway development management model minimum travel costs from each location to the market are computed consistent with the theory analysis finds that transportation costs are critical in determining technology choices with a greater responsiveness among farmers who adopt modern technologies and at times a perverse negative response to lower transport costs among those who employ more traditional techniques in sum the paper presents compelling evidence that the constraints to the adoption of modern technologies and access to markets are interconnected and so should be targeted jointly

the effect of ambiguous risk and coordination on farmers adaptation to climate change a framed field experiment the risk of losses of income and productive means due to adverse weather can differ significantly among farmers sharing a productive landscape and is of course hard to estimate or even guesstimate empirically moreover the costs associated with investments in reduced vulnerability to climatic events are likely to exhibit economies of scope we explore the implications of these characteristics on farmer s decisions to adapt to climate change using a framed field experiment applied to coffee farmers in costa rica as expected we find high levels of risk aversion but even using that as a baseline we further find that farmers behave even more cautiously when the setting is characterized by unknown or ambiguous risk i e poor or non reliable risk information secondly we find that farmers to a large extent coordinated their decisions to secure a lower adaptation cost and that communication among farmers strongly facilitated coordination

innovation and industry evolution the theoretical literature on innovation has been concerned with a single innovation produced by a number of identical agents by contrast we consider a market in which one firm is the current incumbent while the remaining firms are challengers moreover we consider a sequence of innovations so that success does not imply that the successful firm reaps monopoly profits forever after but only until the next better innovation is developed we begin with a fully optimizing behavioral model and derive the equivalent of the schumpeterian process of creative destruction that is a firm enjoys temporary monopoly power but is soon overthrown by a more inventive challenger the essential point to grasp is that in dealing with capitalism we are dealing with an evolutionary process the fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers goods the new methods of production or transportation the new markets the new forms of industrial organization that capitalist enterprise creates schumpeter 1942 pp 82 83

a two stage model of research and development with endogenous second mover advantages this paper describes a simple two stage model of research and development in which the winner of the research stage has the option of moving first in the development stage some unexpected results emerge in equilibrium the leader in the development stage invests less than each follower and is consequently least likely to collect the patent moreover the leader receives a lower expected payoff than each of the followers thus there are endogenous second mover advantages using a game of timing in which the identity of the stackelberg leader is determined to link the two stages i find that firms face quite different incentives in the research stage although the leader invests less than each follower in the research stage as well the leader enjoys higher expected revenue from the complete two stage game than does each follower the equilibrium is inefficient because there is a lag between the time at which research is completed and the time at which development is begun and because aggregate investment is inefficiently asymmetrically distributed across firms

enabling diffusion how complementary inputs moderate the response to environmental policy abstract while policies encouraging diffusion of new technologies provide incentives for adopting the focal good they typically ignore the ecosystem of complementary goods and services based on existing literature on indirect network effects we argue that when there is less availability of complementary goods policies have a smaller impact on diffusion using a natural experiment based on the establishment of state level solar carve out policies we demonstrate that solar power installations increased substantially more after the policy in cities where a critical complementary good qualified installers was more available

learning by doing and learning from others human capital and technical change in agriculture household level panel data from a nationally representative sample of rural indian households describing the adoption and profitability of high yielding seed varieties hyvs associated with the green revolution are used to test the implications of a model incorporating learning by doing and learning spillovers the estimates indicate that i imperfect knowledge about the management of the new seeds was a significant barrier to adoption ii this barrier diminished as farmer experience with the new technologies increased iii own experience and neighbors experience with hyvs significantly increased hyv profitability and iv farmers do not fully incorporate the village returns to learning in making adoption decisions

impacts of prices and transactions costs on input usage in a liberalizing economy evidence from tanzanian coffee growers despite improvements in production incentives agricultural output in africa remained sluggish through the 1990s low use of purchased inputs may be part of the cause of persistently low productivity in african agriculture this article analyzes the roles of relative prices and transactions costs in explaining low use of chemical inputs among tanzanian coffee growers a sample selection model indicates that output prices exert great influence on input purchases and that both fixed and variable transactions costs affect input use decisions travel costs in input and output markets have distinct effects on input usage implying distinct avenues for interventions to promote more intensive use of agricultural inputs

modeling technology adoption in developing countries an analysis of technology adoption decisions by poor farmers is provided some possible empirical models for studying technology adoption are reviewed the issue of theoretical consistency is dealt with in terms of the costs of such consistency measured in data needs and model complexity and the benefits measured in terms of understanding the micro economic foundations of adoption

rules of thumb for social learning this paper studies agents who consider the experiences of their neighbors in deciding which of two technologies to use we analyze two learning environments one in which the same technology is optimal for all players and another in which each technology is better for some of them in both environments players use exogenously specified rules of thumb that ignore historical data but may incorporate a tendency to use the more popular technology in some cases these naive rules can lead to fairly efficient decisions in the long run but adjustment can be slow when a superior technology is first introduced

technological change and managerial ability evidence from a malaysian artisanal fishery technological progress can improve economic development but its role in the harvest of common resources has received little attention we study the relationship between skill and the use of electronic and mechanical innovations in the productivity of malaysian artisanal fishers surprisingly electronics users do not define the frontier and mechanical winch adopters produced well inside it we show that if technology is a skill substitute rather than a complement then it helps less efficient users catch up to the production frontier policy makers must balance the implications for participation rates and resource depletion against gains for the least skilled participants

modeling farmers decisions on tea varieties in vietnam a multinomial logit analysis this article analyzes households choice on tea varieties in vietnam by using a multinomial logit model the modeling takes into account the issue of unobserved individual heterogeneity and the endogeneity of some explanatory variables use of chemical and organic fertilizers the results show that important factors influencing the decision to adopt one type of tea varieties include income age household size farming contract and use of organic fertilizers but also membership of professional associations such as the tea association and the farmers union

he came he saw and he waited an empirical analysis of inertia in technology adoption the innovation adoption literature has focused primarily on a producer s decision of whether and how much to adopt an equally pertinent question is when to adopt because in the case of new techno

location and uptake integrated household and gis analysis of technology adoption and land use with application to smallholder dairy farms in kenya abstract gis derived measures of location and space have increasingly been used in models of land use and ecology however they have made few inroads into the literature on technology adoption in developing countries which continues to rely mainly on survey derived information location with all its dimensions of market access demographics and agro climate nevertheless remains key to understanding potential for technology use the measures of location typically used in the adoption literature such as locational dummy variables that proxy a range of locational factors now appear relatively crude given the increased availability of more explicit gis derived measures this paper attempts to demonstrate the usefulness of integrating gis measures into analysis of technology uptake for better differentiating and understanding locational effects a set of gis derived measures of market access and agro climate are included in a standard household model of technology uptake applied to smallholder dairy farms in kenya using a sample of 3330 geo referenced farm households the three technologies examined are keeping of dairy cattle planting of specialised fodder and use of concentrate feed logit estimations are conducted that significantly differentiate effects of individual household characteristics from those related to location the predicted values of the locational variables are then used to make spatial predictions of technology potential comparisons are made with estimations based only on survey data which demonstrate that while overall explanatory power may not improve with gis derived variables the latter yield more practical interpretations which is further demonstrated through predictions of technology uptake change with a shift in infrastructure policy although requiring large geo referenced data sets and high resolution gis layers the methodology demonstrates the potential to better unravel the multiple effects of location on farmer decisions on technology and land use

microeconomic approaches to development schooling learning and growth within the field of economic development over the past 15 years or so particularly significant advances have been made in what can be loosely called micro development an area defined principally by the units that are examined not by a particular methodological approach the units may be indi viduals households networks banks government agencies and so on as opposed to countries within this area economists use a wide variety of empirical methods informed to different degrees by economic models they use data from developed and

technological diffusion with social learning this paper attributes the slow diffusion of innovations to an informational externality in the adoption process the profitability of new technologies is uncertain but firing can learn progressively through observing the adoption experience of others given this prospect of social learning every firm would prefer that other firms adopt before it does in the absence of explicit coordination the firms could end up in a sequence of waiting contests this results in staggered adoptions even when all firms are ex ante identical the pace of diffusion is determined endogenously and shown to depend on the characteristics of the innovation copyright 1995 by blackwell publishing ltd

taking a new look at empirical models of adoption average treatment effect estimation of adoption rates and their determinants this article shows that the observed sample adoption rate does not consistently estimate the population adoption rate even if the sample is random it is proved that instead the sample adoption rate is a consistent estimate of the population joint exposure and adoption rate which does not inform about adoption per se likewise it is shown that a model of adoption with observed adoption outcome as a dependent variable and where exposure to the technology is not observed and controlled for cannot yield consistent estimates of the determinants of adoption the article uses the counterfactual outcomes framework to show that the true population adoption rate corresponds to what is defined in the modern policy evaluation literature as the average treatment effect ate which measures the effect or impact of a treatment on a person randomly selected in the population in the adoption context a treatment corresponds to exposure to the technology the article uses the ate estimation framework to derive consistent nonparametric and parametric estimators of population adoption rates and their determinants and applies the results to consistently estimate the population adoption rates and determinants of the nerica new rice for africa rice varieties in c ote d ivoire the ate methodological approach developed in the article has significant policy implications with respect to judging the intrinsic merit of a new technology in terms of its potential demand by the target population independently of issues related to its accessibility and in terms of the decision to invest or not in its wide scale dissemination

optimal contracts for experimentation this paper studies a model of long term contracting for experimentation we consider a principal agent relationship with adverse selection on the agent s ability dynamic moral hazard and private learning about project quality we find that each of these elements plays an essential role in structuring dynamic incentives and it is only their interaction that generally precludes efficiency our model permits an explicit characterization of optimal contracts

welfare measurements using contingent valuation a comparison of techniques three commonly used techniques of asking contingent valuation questions are compared iterative bidding payment cards and dichotomous choice the results reveal that no single contingent valuation technique is neutral in the elicitation of hicksian surplus and each technique has its strengths and weaknesses the iterative bidding estimates contain a starting point bias while the payment card and dichotomous choice estimates were influenced by the interviewers soliciting the contingent values finally the analysis of dichotomous choice responses involves unresolved issues that warrant further investigation on the other hand dichotomous choice is the easiest technique to administer in a survey setting

paying for environmental services an analysis of participation in costa rica s psa program summary costa rica has long been a leader among developing countries in the design of and experimentation with innovative environmental programs since 1997 costa rica s pagos de servicios ambientales payments for environmental services program has provided payments to more than 4 400 farmers and forest owners for reforestation forest conservation and sustainable forest management activities econometric analysis of a survey of farmers and forest owners including both psa participants and nonparticipants shows that farm size human capital and household economic factors and information variables significantly influence participation in psa program alternatives large farmers and forest owners are disproportionately represented among program participants

insurance credit and technology adoption field experimental evidence from malawi this brief summarizes the insurance credit and technology adoption field experimental evidence from malawi the farmers were offered loans for the november 2006 planting season does production risk suppress the demand for credit the author implemented a randomized field experiment to ask whether provision of insurance against a major source of production risk induces farmers to take out loans to adopt a new crop technology the study sample was composed of roughly 800 maize and groundnut farmers in malawi where by far the dominant source of production risk is the level of rainfall the author randomly selected half of the farmers to be offered credit to purchase high yielding hybrid maize and groundnut seeds for planting in the november 2006 crop season the other half of farmers were offered a similar credit package but were also required to purchase at actuarially fair rates a weather insurance policy that partially or fully forgave the loan in the event of poor rainfall surprisingly take up was lower by 13 percentage points among farmers offered insurance with the loan take up was 33 0 percent for farmers who were offered the uninsured loan there is suggestive evidence that reduced take up of the insured loan was due to farmers already having implicit insurance from the limited liability clause in the loan contract insured loan take up was positively correlated with farmer education income and wealth which may proxy for the individual s default costs by contrast take up of the uninsured loan was uncorrelated with these farmer characteristics

the economic valuation of farm animal genetic resources a survey of available methods abstract genetic erosion of domestic animal diversity has placed 30 of the world s breeds at risk of extinction often as a result of government policy programmes conservation and sustainable development of animal genetic resources angr require a broad focus that includes the many adaptive breeds that survive well in the low external input agriculture typical of developing countries environmental economic valuation methodologies have an important role to play in supporting decisions regarding which breeds should be conserved and how this should be done however angr in general and valuation methods in particular have received very little attention this paper provides a survey of the methods available for the valuation of angr and the steps that must be taken in order to test some of the more promising methodologies in practice

innovation diffusion in heterogeneous populations contagion social influence and social learning new ideas products and practices take time to diffuse a fact that is often attributed to some form of heterogeneity among potential adopters this paper examines three broad classes of diffusion models contagion social influence and social learning and shows how to incorporate heterogeneity into each at a high level of generality without losing analytical tractability each type of model leaves a characteristic footprint on the shape of the adoption curve which provides a basis for discriminating empirically between them the approach is illustrated using the classic study of ryan and gross 1943 on the diffusion of hybrid corn

the dynamics of agricultural biotechnology adoption lessons from series rbst use in wisconsin 1994 2001 this article exploits panel data from wisconsin dairy farmers to examine the dynamics of recombinant bovine somatotropin rbst adoption and to identify the characteristics that distinguish among nonadopters disadopters and early and late adopters panel methods are used to control for omitted variables and endogenous regressors that call into question coefficient estimates derived from cross section adoption models the results however confirm previous findings that larger farms with complementary feeding technologies are more likely to adopt rbst nonadopters appear quite unlikely to become adopters and rbst adoption will remain at rather moderate levels in wisconsin

second mover advantage and entry timing we describe a model of entry timing assuming that a second mover can benefit from observing the experience of a first mover we focus on how market attractiveness characteristics such as size and cost affect the time until first entry the effects depend on whether the number of participants is exogenous or endogenous in the former case a more attractive market leads to earlier entry in the latter case it leads to later entry treating the number of firms as an integer free entry leads to non monotone but testable effects of market attractiveness on entry timing

bayesian learning in an infant industry model abstract most analyses of the infant industry argument assume that production early on benefits subsequent production in deterministic fashion this paper presents an alternative framework for evaluating the infant industry argument that focuses on imperfect information as a barrier to entry initial entrants provide information of social value by reducing uncertainty for potential followers about the suitability of local conditions in contrast to earlier work i show that factors that increase the informational barrier to entry may lower the optimal subsidy to the infant industry and that the standard test of the success of infant industry policy is not always valid 1997 elsevier science b v

measuring human capital and its effects on wage growth ever since mincer years of labour market experience were used to approximate individual s general human capital while years of seniority were used to approximate job specific human capital this specification is restrictive because it assumes that starting wages at a new job depend only on job market experience in this paper i investigate the effects of human capital on wage growth by using a more flexible specification of the wage equation which allows for a rich set of information on past employment spells to affect the starting wages in addition i endogenize the labour mobility decision in order to illuminate the effects of human capital accumulation patterns on wage growth i compare counterfactual career paths for representative individuals copyright 2010 blackwell publishing ltd

heroin consumption prices and addiction evidence from self reported panel data estimation models of drug demand should encompass the aspect of addiction here we consider two static panel data regression models and two cross section models with lags or leads in drug consumption as additional regressors heroin injectors attending a needle exchange service in oslo were interviewed twice with a one year interval despite our relatively small sample we obtain statistically significant price and income responses for nearly all of the models and specifications applied the sample is split by dealing status with dealers obtaining price elasticities in the range of 0 15 1 51 and non dealers 0 71 1 69 somewhat surprisingly the estimates of the variance of the latent individual specific variable are rather low in the panel data models although higher for non dealers than for dealers

decision making in livestock conservation in this article theory and practical implementations of decision making in livestock conservation are reviewed it is argued that the objective of livestock conservation is a composite of maintaining between and within breed diversity and single breeds of recognised value assuming that this goal can be reflected in an objective function decision making requires maximisation of this objective function with or without restrictions different strategies have been proposed in the literature to achieve this goal while the diversity measure suggested by weitzman 1992 weitzman m l 1992 on diversity quart j economics cvii 363 405 is not fully appropriate to be applied to breed conservation within livestock species the approach of maximising expected diversity weitzman 1993 weitzman m l 1993 what to preserve an application of diversity theory to crane conservation quart j economics cvii 157 183 is seen as a fundamental concept in this area although highly elaborate methods of decision making are discussed in the scientific literature the concepts presently used by national or international authorities or non government organisations are rather simplistic mainly risk related and based on simple functions of population size it is argued that decision making has to account for the global diversity of a species and therefore decisions and conservation activities should be coordinated on an international level the use of more appropriate decision rules will strongly increase the cost efficiency of conservation investments livestock conservation should be based on an extended objective function reflecting the expected future value of the conserved set of breeds which encompasses within and between breed diversity as well as specific traits and cultural or scientific value of the main breeds a critical issue is the derivation of the required parameters like the breed value or the risk status of a breed since it will generally be difficult to obtain exact values decision making under uncertainty will be the usual challenge and bayesian decision theory might be an option the optimum allocation pattern and implementation of conservation activities can be derived based on weitzman s expected diversity concept approximate decision rules for breed prioritisation based on the extinction probability of a breed and its marginal objective function are given even if the respective parameters are not perfectly known the use of the suggested approaches has the potential to double the cost efficiency in terms of maintained diversity per conservation dollar spent compared to the simplistic approaches that are used today d 2005 elsevier b v all rights reserved

time to change what to sow risk preferences and technology adoption decisions of cotton farmers in china this paper examines the role of individual risk attitudes in the decision to adopt a new form of agricultural biotechnology in china i conducted a survey and a field experiment to elicit the risk preferences of chinese farmers who faced the decision of whether to adopt genetically modified bt cotton a decade ago in my analysis i expand the measurement of risk preferences beyond expected utility theory to incorporate prospect theory i find that farmers who are more risk averse or more loss averse adopt bt cotton later farmers who overweight small probabilities adopt bt cotton earlier

a century long perspective on agricultural development this article strategically surveys the past century s literature on agricultural development we organize the discussion around three grand themes that reveal the richness of agricultural development as an intellectual endeavor first we explore the role of agriculture in the broader development process from a macroeconomic and political economy perspective we then examine the role of technological and institutional change in successful agricultural development finally the focus turns to a microeconomic perspective on agricultural household decision making and the problems of imperfect and missing markets asymmetric information and transactions costs that lead to widespread apparent inefficiency and disequilibrium

learning through noticing theory and experimental evidence in farming existing learning models attribute failures to learn to a lack of data we model a different barrier given the large number of dimensions one could focus on when using a technology people may fail to learn because they failed to notice important features of the data they possess we conduct a field experiment with seaweed farmers to test a model of learning through noticing we find evidence of a failure to notice on some dimensions farmers do not even know the value of their own input interestingly trials show that these dimensions are the ones that farmers fail to optimize furthermore consistent with the model we find that simply having access to the experimental data does not induce learning instead farmers change behavior only when presented with summaries that highlight the overlooked dimensions we also draw out the implications of learning through noticing for technology adoption agricultural extension and the meaning of human capital we thank andy newman matthew rabin and andrei shleifer for helpful comments as well as seminar participants at the behavioural decision theory conference berkeley bu and harvard mit

social learning neighborhood effects and investment in human capital evidence from green revolution india abstract this paper empirically identifies social learning and neighborhood effects in schooling investments in a new technology regime social learning implies that learning is most efficient when observed heterogeneity in schooling is greatest the estimates of learning investment rule from farm household panel data at the onset of the green revolution in india show that i agents learn about schooling returns from income realizations of their neighbors and ii the speed of learning is high when the variation of schooling is large thus schooling distribution of the parents generation in a community has externalities to schooling investments in children simulations show that the variations in schooling within and across communities generate variations in child enrollment rate and average household income

smallholder participation in contract farming comparative evidence from five countries summary supermarkets specialized wholesalers processors and agro exporters are transforming the marketing channels into which smallholder farmers sell produce in low income economies we develop a conceptual framework with which to study contracting between smallholders and a commodity processing firm we then synthesize results from empirical studies of contract farming arrangements in five countries ghana india madagascar mozambique and nicaragua the resulting meta narrative documents patterns of participation the welfare gains associated with participation reasons for nonparticipation the significant extent of contract noncompliance and the considerable dynamism of these value chains as farmers and firms enter and exit frequently

second mover advantages in the strategic adoption of new technology under uncertainty abstract this paper introduces technological uncertainty into a timing game of new technology adoption it is shown that the timing neither necessarily involves first mover advantages in precommitment equilibria reinganum review of economic studies xlviii 1981 395 405 nor rent equalization due to the threat of preemption fudenberg and tirole review of economic studies lii 1985 383 401 rather there may be second mover advantages because of informational spillovers furthermore the model predicts that the equilibrium payoffs will typically be discontinuous and non monotonic in the probability that the new technology is profitable a welfare analysis reveals several market failures and suggests that policy intervention should adequately depend on the nature of uncertainty and the rate of technological progress

models of technology diffusion abstract the literature on new technology diffusion is vast and it spills over many conventional disciplinary boundaries this paper surveys the literature by focusing on alternative explanations of the dominant stylized fact that the usage of new technologies over time typically follows an s curve the most commonly found model which is used to account for this model is the so called epidemic model which builds on the premise that what limits the speed of usage is the lack of information available about the new technology how to use it and what it does the leading alternate model is often called the probit model which follows from the premise that different firms with different goals and abilities are likely to want to adopt the new technology at different times in this model diffusion occurs as firms of different types gradually adopt it there are actually many ways to generate an s curve and the third class of models which we examine are models of density dependence popularized by population ecologists in these models the twin forces of legitimation and competition help to establish new technologies and then ultimately limit their take up finally we look at models in which the initial choice between different variants of the new technology affect the subsequent diffusion speed of the chosen technology such models often rely on information cascades which drive herd like adoption behaviour when a particular variant is finally selected

relative preferences for soil conservation incentives among smallholder farmers evidence from malawi this paper uses framed choice experiments to examine the preferences of smallholder farmers in malawi regarding alternative policy based incentives to adopt conservation practices that reduce soil erosion and increase yields the policy incentives offered in the choice experiments included an ideal index based crop insurance contract an index insurance contract with basis risk cash payments and fertilizer subsidies prior to implementing the choice experiments the farmers participated in a workshop utilizing small group based dynamic learning games that demonstrated how index based crop insurance contracts function the choice experiment results indicate that most farmers preferred cash payments to index insurance contracts even when the insurance contracts offered substantially higher expected returns further more risk averse farmers were more likely to prefer cash payments than less risk averse and risk loving farmers

learning through noticing theory and evidence from a field experiment we consider a model of technological learning under which people learn through noticing they choose which input dimensions to attend to and subsequently learn about from available data using this model we show how people with a great deal of experience may persistently be off the production frontier because they fail to notice important features of the data they possess we also develop predictions on when these learning failures are likely to occur as well as on the types of interventions that can help people learn we test the model s predictions in a field experiment with seaweed farmers the survey data reveal that these farmers do not attend to pod size a particular input dimension experimental trials suggest that farmers are particularly far from optimizing this dimension furthermore consistent with the model we find that simply having access to the experimental data does not induce learning instead behavioral changes occur only after the farmers are presented with summaries that highlight previously unattended to relationships in the data jel codes d03 d83 o13 o14 o30 q16

human capital measurement theory and practice in early 2010 the us economy sits in its most precarious position since the great depression of the 1930s at its height in 1933 25 of all workers and 37 of all non farm workers were completely out of work the unemployment rate in the usa is now over 9 5 1 as figure 1 indicates when the us economy spirals into severe recession unemployment cascades up as well periods of recession coincide with significant rise in unemployment and the two forces feed on each other taxing economic systems when consumer spending declines and capital stock markets endure significant loss unemployment spirals upward earned income tax revenue declines government expenditure on benefits for the unemployed increase consumer spending declines further and sales tax revenue declines housing values decline in a recession which causes property tax revenue to decline which causes a shortfall in municipal tax revenue so city budgets do not balance so more unemployment occurs now in the public sector the us and the world economy in general are still in the throes of such cataclysmic events even while this is written in the summer of 2009 europe s economy continues in a similarly dire situation with overall unemployment at 9 5 for the european union as of may 2009 2 interestingly australia unemployment hovers in the 5 8 rate range 3 the crash of the us economy has reverberated throughout the world and adversely impacted virtually every other economic system on the globe this sad fact is well known and undisputed by economists and social scientists throughout the world the us congress sits as this is being written in the summer of 2009 and debates an almost 1 trillion dollar healthcare package to assist in part in bringing the us economy out of crisis on february 17th of 2009 us president obama signed into law an 800 billion plus stimulus package significant debate in the usa continues as to whether the immense government spending and attendant increase in debt has done any good britain germany and other world powers are undergoing similar investments and debates hundreds of millions of these dollars are earmarked for projects to increase employment and increase the human capital hc of the world labour force on programmes such as educational loans and subsidies

the diffusion of new agricultural technologies the case of crossbred cow technology in tanzania the recent literature on agricultural technology adoption shows that diffusion of new technologies varies significantly across space and time furthermore puzzles exist about why some seemingly profitable technologies are not adopted especially in livestock production we employ a hazard or duration function to explain diffusion of crossbred cow technology in a unique sample of tanzania farmers a farmer s adoption of crossbred technology depends positively on the proximity of his farm to other users on his schooling and on his access to credit and contact with extension agents

impact of bayesian learning and externalities on strategic investment we investigate the interplay between learning effects and externalities in the problem of competitive investments with uncertain returns we examine a game theoretic duopoly investment model in which i a firm can learn about the profitability of the investment by observing the performance of the first mover and ii externalities exist between the investments of two firms we find a region of a war of attrition between the two firms in which the interplay between externalities and learning gives rise to counterintuitive effects on investment strategies and payoffs in particular we find that contrary to the conventional war of attrition where an increase in benefits for the follower generally delays the first move an increase in the rate of learning which tends to benefit the follower can hasten the first investment this paper was accepted by james smith decision analysis

design of sequential experiments for contingent valuation studies abstract sequential experimentation is recommended as an alternative to the usual one or two shot approach to contingent valuation surveys the sequential c optimal approach is introduced and developed and it is compared to the established parametric and non parametric sequential procedures it is shown to be an improvement in terms of statistical precision in a finite sample over the standard sequential procedures

the importance of learning in the adoption of high yielding variety seeds to date due to the lack of panel data most micro level empirical studies of technology adoption have used cross sectional data these studies cannot examine the dynamic processes of adoption such as learning this article uses panel data to study the adoption of a new high yielding variety seed first it establishes that learning is an important variable in the adoption process second it establishes that cross sectional estimates of a dynamic process are biased but that the extent of this bias may be small third it illustrates the econometric methods needed to estimate a dynamic model when controlling for unobserved household heterogeneity

organizational change skill formation human capital measurement evidence from italian manufacturing firms basing on a job competition approach in this paper we provide a labour demand oriented measure of human capital as defined by the amount of specific skills a firm generates through work based training wbt activities by merging three rich firm level datasets we estimate the impact of a set of variables that are supposed to affect both the propensity to invest in wbt and the intensity of training within the italian manufacturing industry over the period 2001 2005 the estimates show that the effects of innovation on wbt is higher when the introduction of new technologies is supported by organizational innovations when looking at the nature of wbt we investigate the different determinants of the firms propensity to provide both in house and outside training finally we estimate training intensity in terms respectively of the number of training activities provided private and total training costs and the share of trainees

detailed estimation of worklife expectancy for the measurement of human capital accounting for marriage and children abstract measuring an individual s human capital at a point in time as the present actuarial value of expected net lifetime earnings has a lengthy history calculating such measures requires accurate estimates of worklife expectancy here worklife estimates for men and women in the usa categorized by educational attainment race marital status parental status and current labour force status are presented race has a much larger impact on the worklife expectancy of men than women education is associated with larger worklife differentials for women the association between marriage and worklife expectancy is significant but of opposite sign for men and women married women men have a lower higher worklife expectancy than single women men parenthood is associated with a reduction in the worklife expectancy of women the association is smaller and varies from positive for some education marital status groups to negative for others for men

the complex dynamics of smallholder technology adoption the case of sri in madagascar this article explores the dynamics of smallholder technology adoption with particular reference to a high yielding low external input rice production method in madagascar we present a simple model of technology adoption by farm households in an environment of incomplete financial and land markets we then use a probit model and symmetrically censored least squares estimation of a dynamic tobit model to analyze the decisions to adopt expand and disadopt the method we find that seasonal liquidity constraints discourage adoption by poorer farmers learning effects both from extension agents and from other farmers exert significant influence over adoption decisions

information transmission in irrigation technology adoption and diffusion social learning extension services and spatial effects in this article we investigate the role of information transmission in promoting agricultural technology adoption and diffusion through extension services and social learning we develop a theoretical model of technology adoption and diffusion which we then empirically apply using duration analysis on a micro dataset consisting of recall data covering the period 1994 2004 for olive producing farms from crete greece our findings suggest that both extension services and social learning are strong determinants of technology adoption and diffusion while the effectiveness of each of the two informational channels is enhanced by the presence of the other

the impact of advanced technology adoption on wage structures evidence from taiwan manufacturing firms we examine the impact of advanced technology adoption on wage and employment structures in taiwan using a survey of manufacturing firms that provides direct information on the use of advanced technologies we find that firms using more advanced technologies pay higher wages to both non production and production workers and employ higher fractions of non production workers controlling for the possible endogeneity of technology adoption suggests that the estimated impact of new technologies on wages is downward biased and that the effect on production workers wages may be minimal

demand and supply in new markets diffusion with bilateral learning i explore the endogenous joint evolution of demand and supply in new markets firms and consumers learn in a bayesian fashion by observing the behavior of other firms and consumers respectively as a result endogenous information diffusion takes place on both sides of the market in equilibrium entry occurs in waves and its level depends on two distinct informational effects the model identifies an externality that provides a natural explanation for s shaped diffusion paths entry reveals information to the consumers about the value of the new product and thus early waves of entry affect the expected profitability of subsequent entry

cost and income based measures of human capital human capital is increasingly believed to play an important role in the growth process however adequately measuring its stock remains controversial in this paper three general approaches to measurement are identified cost based income based and educational stock based this survey focuses on the first two approaches and provides a critical review of the theories and their applications to data from a range of countries particular emphasis is placed upon the work of jorgenson and fraumeni 1989 1992 and some new results for new zealand based upon their approach are also presented

the reaper and the scanner indivisibility led incremental innovations and the adoption of new technologies widespread adoption of a new capital embodied technology requires a continu ous flow of incremental innovations a few of them address the key problem of indivisibility by making renting the new machine a viable alternative to buying it or by dividing it up into modular elements such incremental innovations differ from the learning by doing effects usually considered by diffusion models and greatly affect the structure of the adopting industry the case for keeping them in due account is made by revisiting paul david s classic paper on the mccormick reaper by criticising the subsequent evolution of threshold models of adoption and by summarising my own findings on the diffusion of electronic pre press devices

a dynamic game of r and d patent protection and competitive behavior a theory of dynamic optimal resource allocation to r and d in an n firm industry is developed using differential games this technique represents a synthesis of the analytic methods previously applied to the problem static game theory and optimal control the use of particular functional forms allows the computation and detailed discussion of the nash equilibrium in investment rules this paper addresses the problem of resource allocation to research and development among the important issues that a firm engaging in r and d must evaluate are uncertainty regarding the feasibility and profitability of a particular innovation the possibility of a protracted development period the possibility that a rival firm may innovate first capturing either a patent or a significant share of the new market the possibility that a rival firm may imitate the innovation and appropriate some of the profits in the new market in what follows we will develop a theory of optimal resource allocation to research and development which incorporates the aspects of r and d enumerated above we will use a dynamic game theoretic analysis determining the nash equilibrium strategies for n identical firms the availability of perfect patent protection is shown to accelerate development of the innovation and the effect of increasing rivalry is addressed the impact of increasing rivalry on nash equilibrium investment in r and d depends upon the degree of appropriability of rewards if patent protection is perfect then increasing the number of nash rivals results in increased r and d effort however when imitation is rewarded the opposite may be true finally some notions of competitive and perfectly competitive equilibrium are examined in the context of the model developed below