Market Imperfections and Farm Technology Adoption Decisions - A Case Study from the Highlands of Ethiopia

Mahmud Yesuf () and Gunnar Köhlin
Additional contact information
Mahmud Yesuf: Environmental Economics Policy Forum for Ethiopia, Ethiopian Development Research Institute, Postal: Blue Building/Addis Ababa Stadium, P.O. Box 2479, Addis Ababa, Ethiopia

No 403, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: This paper investigates the impacts of market and institutional imperfections on technology adoption in a model that considers fertilizer use and soil conservation to be joint decisions. Controlling for plot characteristics and other factors, we found that a household’s decision to adopt fertilizer significantly and negatively depends on whether the same household adopts soil conservation. The reverse causality, however, was insignificant. We also found that outcomes of market imperfections, such as limited access to credit, plot size, risk considerations, and rates-of-time preference, were significant factors in explaining variations in farm technology adoption decisions. Relieving the existing market imperfections will most likely increase the adoption rate of farm technologies.

Keywords: Bivariate probit; fertilizer adoption; market imperfections; risk aversion; time preferences; soil conservation (search for similar items in EconPapers)
JEL-codes: C35 D43 Q12 Q24 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2009-11-30
New Economics Papers: this item is included in nep-afr, nep-agr, nep-dev, nep-mfd and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Working Paper: Market Imperfections and Farm Technology Adoption Decisions: A Case Study from the Highlands of Ethiopia (2008)
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