Targeting Technology to Increase Smallholder Profits and Conserve Resources: Experimental Provision of Laser Land-Leveling Services to Indian Farmers

Travis Lybbert, Nicholas Magnan (), David Spielman, Anil K. Bhargava and Kajal Gulati

Economic Development and Cultural Change, 2018, vol. 66, issue 2, 265 - 306

Abstract: With heterogeneous demand and consumption externalities, market segmentation and targeting can improve social welfare. We use a selective trial for laser land leveling (LLL) in India to understand such targeting strategies. We elicit farmer demand for and benefits from LLL services. LLL reduces groundwater extraction by 24%, with comparable fuel savings from reduced pumping. To leverage positive externalities, we combine farmer demand, LLL pumping effects, and service provider costs to evaluate the cost-effectiveness and other impacts of potential targeting strategies. A first-hour LLL discount—a second-degree price discrimination strategy—emerges as the most cost-effective targeting strategy for reducing groundwater extraction.

Date: 2018
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