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The Value of Information in Technology Adoption

Asad Islam (), Philip Ushchev (), Yves Zenou () and Xin Zhang
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Xin Zhang: Beijing Normal University

No 12672, IZA Discussion Papers from Institute of Labor Economics (IZA)

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

Keywords: Bayesian model; technology adoption; peers; risk attitude; RCT; Bangladesh (search for similar items in EconPapers)
JEL-codes: O13 Z13 (search for similar items in EconPapers)
Pages: 64 pages
Date: 2019-10
New Economics Papers: this item is included in nep-agr, nep-dev and nep-exp
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