Probability Weighting and Input Use Intensity in a State-Contingent Framework

Stein Holden () and John Quiggin
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John Quiggin: School of Economics, University of Queensland, Postal: Brisbane St Lucia, QLD 4072, Australia

No 8/17, CLTS Working Papers from Norwegian University of Life Sciences, Centre for Land Tenure Studies

Abstract: Climate risk represents an increasing threat to poor and vulnerable farmers in drought-prone areas of Africa. This study assesses the fertilizer adoption responses of food insecure farmers in Malawi, where Drought Tolerant (DT) maize was recently introduced. A field experiment, eliciting risk attitudes of farmers, is combined with a detailed farm household survey. A state-contingent production model with rank-dependent utility preferences is estimated. Over-weighting of small probabilities was associated with less use of fertilizer on all maize types and particularly so on the more risky improved maize types.

Keywords: Climate risk; state-contingent production; subjective probability weighting; technology adoption; adaptation; maize; Drought Tolerant maize; fertilizer use (search for similar items in EconPapers)
JEL-codes: C93 D03 O33 Q12 Q18 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2017-05-05, Revised 2019-10-21
New Economics Papers: this item is included in nep-agr, nep-env and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:nlsclt:2017_008

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