NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Selection and Comparative Advantage in Technology Adoption

Tavneet Suri

NBER Working Paper No. 15346
Issued in September 2009
NBER Program(s):   PR

This paper investigates an empirical puzzle in technology adoption for developing countries: the low adoption rates of technologies like hybrid maize that increase average farm profits dramatically. I offer a simple explanation for this: benefits and costs of technologies are heterogeneous, so that farmers with low net returns do not adopt the technology. I examine this hypothesis by estimating a correlated random coefficient model of yields and the corresponding distribution of returns to hybrid maize. This distribution indicates that the group of farmers with the highest estimated gross returns does not use hybrid, but their returns are correlated with high costs of acquiring the technology (due to poor infrastructure). Another group of farmers has lower returns and adopts, while the marginal farmers have zero returns and switch in and out of use over the sample period. Overall, adoption decisions appear to be rational and well explained by (observed and unobserved) variation in heterogeneous net benefits to the technology.

download in pdf format
   (596 K)

email paper

This paper is available as PDF (596 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w15346

Published: “Selection and Comparative Advantage in Technology Adoption”, Econometrica., 79 (1), pp. 159-209, January 2011.

Users who downloaded this paper also downloaded these:
Skinner and Staiger w11251 Technology Adoption From Hybrid Corn to Beta Blockers
Duflo, Kremer, and Robinson w15131 Nudging Farmers to Use Fertilizer: Theory and Experimental Evidence from Kenya
Jack and Suri w16721 Mobile Money: The Economics of M-PESA
Matsuyama w3606 Agricultural Productivity, Comparative Advantage and Economic Growth
Hall and Khan w9730 Adoption of New Technology
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us