Please use this form to submit your study for inclusion into our database. It will be checked by a member of the Innovation Growth Lab team, who may be in contact to ask for more information. Your email address * Your name * Title * The name of the study Short summary A brief description of the project's goals and its current state Abstract <p>The lack of adoption of new farming technologies despite known benefits is a well-documented phenomenon in development economics. In addition to a number of market constraints, risk aversion predominates the discussion of behavioral determinants of technology adoption. We hypothesize that ambiguity aversion may also be a determinant, since farmers may have less information about the distribution of yield outcomes from new technologies compared with traditional technologies. We test this hypothesis with a laboratory experiment in the field in which we measure risk and ambiguity preferences. We combine our experiment with a survey in which we collect information on farm decisions and identify market constraints. We find that ambiguity aversion does indeed predict actual technology choices on the farm.</p> The full abstract of the study, if available Links http://www.cirano.qc.ca/pdf/publication/2007s-01.pdf Links to any published papers and related discussions Authors * Affiliations Academic and other institutes that the authors of the study are members of Delivery partner Organisations involved in delivering the trial, if appropriate Year Year Year199419951996199719981999200020012002200320042005200620072008200920102011201220132014201520162017201820192020202120222023202420252026 Month MonthJanFebMarAprMayJunJulAugSepOctNovDec Day Day12345678910111213141516171819202122232425262728293031 Journal Journal publishing the study, if available Publication stage * Working Paper Published Ongoing Research Forthcoming Discussion Paper Research theme * Entrepreneurship Innovation Business Growth Country Country or countries where this study took place. Topics What sort of topics does the study cover? Sample attributes Hypotheses / research question Hypothesis 1 (risk preferences): Technology adoption is decreasing in risk aversion. Hypothesis 2 (ambiguity preferences): Technology adoption is decreasing in ambiguity aversion. Hypothesis 3 (non-rational behaviour): Technology adoption is decreasing in non-rational behaviour. Hypothesis 4 (non-behavioural hypotheses): the following summarises some of the main non-behavioural determinants of technology adoption: - Income positively affects a farmer's decision to adopt a new technology. Conversely poverty will reduce the probability that the farmer adopts. - Poor farmers who face a borrowing constraint are less likely to adopt a new technology than farmers who can draw from their savings or who have access to credit. - Learning by doing is an important determinant of technology adoption. More educated and more experienced farmers are thus more likely to adopt a new technology. - Farmers are more likely to adopt a new variety if their neighbours have already adopted it themselves. Sample Trial population and sample selection Farmers in rural communities in Central Costa and Central Sierra in Peru. Participants had to have basic literacy and numeracy skills, and be at least 18 years old. As community leaders were enlisted to help recruit subjects, the sample is unlikely to be completely random but should still be representatives of the communities. Number of treatment groups Size of treatment groups 160 subjects Size of control group Unit of analysis Clustered? Yes No Cluster details Trial attributes Treatment description Sessions were conducted as laboratory experiments in the field. Subjects were compensated for showing up. The experiment measures farmers' predispositions toward risk, ambiguity, and toward making individual choices that do not fit the model of rationality by setting up a game in which payoffs are dependent upon risk levels and include variation in the levels of ambiguity, as well. Subjects decisions toward the gambles are recorded in the sessions and are used to construct variables to explain the choice of technology use on the farms using survey data containing information about households and farming choices. Rounds of data collection Baseline data collection and method Peruvian Census containing extensive demographic information on the rural farmers who were identified as subjects. Data collection method and data collected Evaluation Outcome variables <p>Risk Preference Measure: Derived from five options presented to subjects, each containing different payoffs corresponding to levels of uncertainty provided by the probability of the state of nature occurring. Ambiguity Preference Measure: Derived from five options presented to subjects, each related to different payoffs but the subject is unaware of the probability distribution over the state of nature occurring. Dominated Alternative Preference Measure: Measure of subjects' ability to understand the decision-making problem in rational terms. Choice to invest or not invest in new technology: Survey data about investments in new technology (modern crop varieties) taken by the subjects on their actual farms.</p> Results <p>Effect of risk, ambiguity, and dominated decision preferences on farmers' choice of diversification across (modern) varieties of crop: Ambiguity aversion is found to be correlated with technology choice, but risk aversion is not. The more ambiguity averse farmers are, the less likely that they diversify across modern varieties of crop, while risk aversion does not influence this decision.</p> Intervention costs Not applicable. Cost benefit ratio Reference Warnick, J. C. E., Escobal, J., & Laszlo, S. C. (2011). Ambiguity aversion and portfolio choice in small-scale Peruvian farming. The BE Journal of Economic Analysis & Policy, 11(1). Citation for use in academic references
