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Technology Adoption under Uncertainty: Take-Up and Subsequent Investment in Zambia

Paulina Oliva, B. Kelsey Jack, Samuel Bell, Elizabeth Mettetal and Christopher Severen
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Paulina Oliva: University of Southern California
B. Kelsey Jack: University of California, Santa Barbara, and NBER
Samuel Bell: Oregon State University and Shared Value Africa
Elizabeth Mettetal: Abt Associates

The Review of Economics and Statistics, 2020, vol. 102, issue 3, 617-632

Abstract: Technology adoption often requires multiple stages of investment. As new information emerges, agents may abandon a technology that was profitable in expectation. We use a field experiment to vary the payoffs at two stages of investment in a new technology: a tree species that provides on-farm fertilizer benefits. Farmer decisions identify the information about profitability that arrives between the take-up and follow-through stages. Results show that this form of uncertainty increases take-up but lowers average tree survival, decreasing the cost-effectiveness of take-up subsidies. Thus, uncertainty offers another explanation for why even costly technologies may go unused or be abandoned.

Date: 2020
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Working Paper: Technology Adoption Under Uncertainty: Take-Up and Subsequent Investment in Zambia (2015) Downloads
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