Willingness to Pay for a new farm technology given Risk Preferences. Evidence from an experimental auction in Kenya
Hugo De Groote,
P. Marenya and
No 277406, 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia from International Association of Agricultural Economists
This paper describes an experimental auction conducted among maize traders and farmers in Western Kenya to measure adoption for two low-cost technologies that can measure grain moisture content. Willingness-to-pay auctions (WTP) were combined with a risk preference lottery, allowing an opportunity to study the impact of risk preferences on technology adoption. The specifics of this technology also allows us to identify the impact of risk aversion on willingness to pay for a technology when production uncertainty is not part of the equation. We also randomized two variations of the BDM method for collecting WTP data allowing for a mechanism by which to study the impact of the method on valuation data. We find some evidence that risk aversion increased willingness to pay. Another result with implications in implementation of field experiments in the developing world is that farmers were sensitive to the method in which the auction was presented but traders were not. Acknowledgement :
Keywords: Risk; and; Uncertainty (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae18:277406
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