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Factor Market Failures and the Adoption of Irrigation in Rwanda

Maria Jones, Florence Kondylis, John Loeser, Jeremy Magruder

NBER Working Paper No. 26698
Issued in January 2020
NBER Program(s):Development Economics

We examine constraints to adoption of new technologies in the context of hillside irrigation schemes in Rwanda. We leverage a plot-level spatial regression discontinuity design to produce 3 key results. First, irrigation enables dry season horticultural production, which boosts on-farm cash profits by 70%. Second, adoption is constrained: access to irrigation causes farmers to substitute labor and inputs away from their other plots. Eliminating this substitution would increase adoption by at least 21%. Third, this substitution is largest for smaller households and wealthier households. This result can be explained by labor market failures in a standard agricultural household model.

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Document Object Identifier (DOI): 10.3386/w26698

 
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