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The Value of Information in Technology Adoption: Theory and Evidence from Bangladesh

Asad Islam (), Philip Ushchev (), Yves Zenou () and Xin Zhang

No 13419, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We develop a theoretical model in which adoption decisions are based on information received from others about the quality of a new technology and on their risk attitude. We test the predictions of this model using a field experiment in Bangladesh. We show that treated farmers who receive better training in System of Rice Intensification (SRI) technology have more accurate information about this technology, and have a higher impact on the adoption rate of untreated farmers. We also find that untreated farmers that are more risk-averse tend to adopt less and are less influenced by their treated peers. Finally, a trained farmers' impact on his untrained peers increases if he himself adopts SRI technology. Our results indicate that the crucial determinant of technology adoption for untreated farmers is their degree of risk aversion and the accuracy and reliability of information transmission about the quality of technology circulated among farmers.

Keywords: randomized controlled trial (RCT); risk attitude; Technology adoption (search for similar items in EconPapers)
JEL-codes: O13 Z13 (search for similar items in EconPapers)
Date: 2018-12
New Economics Papers: this item is included in nep-agr and nep-exp
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