AMBIGUITY AVERSION AS A PREDICTOR OF TECHNOLOGY CHOICE: EXPERIMENTAL EVIDENCE FROM PERU

Jim Engle-Warnick (), Javier Escobal and Sonia Laszlo

Departmental Working Papers from McGill University, Department of Economics

Abstract: 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.

JEL-codes: C91 O18 O33 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2007-05
New Economics Papers: this item is included in nep-agr, nep-exp, nep-ino, nep-lam and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

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Related works:
Working Paper: Ambiguity Aversion as a Predictor of Technology Choice: Experimental Evidence from Peru (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:mcl:mclwop:2007-04

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