Adoption of Interrelated Agricultural Innovations: Complementarity and the Impacts of Risk, Scale, and Credit

Gershon Feder

American Journal of Agricultural Economics, 1982, vol. 64, issue 1, 94-101

Abstract: The paper presents a model of farm decisions which arise when a farm is faced with two interrelated innovations. The innovations are distinguished by their returns to scale, and may be adopted individually. It is shown that under conditions of uncertainty or a binding credit constraint, the intuitive concept of innovations' complementarity may be misleading, and a more relevant definition of complementarity is derived. The latter helps to explain why policies which enhance adoption of one innovation may discourage adoption of the other, even when the two innovations seem to complement each other.

Date: 1982
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:64:y:1982:i:1:p:94-101.

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