Lemon Technologies and Adoption: Measurement, Theory and Evidence from Agricultural Markets in Uganda

Tessa Bold, Kayuki C. Kaizzi, Jakob Svensson and David Yanagizawa-Drott

The Quarterly Journal of Economics, 2017, vol. 132, issue 3, 1055-1100

Abstract: To reduce poverty and food insecurity in Africa requires raising productivity in agriculture. Systematic use of fertilizer and hybrid seed is a pathway to increased productivity, but adoption of these technologies remains low. We investigate whether the quality of agricultural inputs can help explain low take-up. Testing modern products purchased in local markets, we find that 30% of nutrient is missing in fertilizer, and hybrid maize seed is estimated to contain less than 50% authentic seeds. We document that such low quality results in low average returns. If authentic technologies replaced these low-quality products, however, average returns are high. To rationalize the findings, we calibrate a learning model using data from our agricultural trials. Because agricultural yields are noisy, farmers’ ability to learn about quality is limited and this can help explain the low quality equilibrium we observe, but also why the market has not fully collapsed.

JEL-codes: D83 L15 O13 O33 Q12 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (108)

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