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The different effects of risk preferences on the adoption of agricultural technology: evidence from a rural area in Cambodia

Daichi Shimamoto (), Hiroyuki Yamada and Ayako Wakano ()
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Ayako Wakano: Graduate School of Economics, Osaka University, Japan

No 14-07, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This paper investigates how farmers f risk attitudes affected the adoption of agricultural technology in a rural area in Cambodia. We incorporated prospect theory to farmers f utility function and examined the effect of the risk attitude of farmers to the adoption of two technologies: adoption of a moisture meter for measuring the moisture content of seeds, a recently introduced post-harvest technology, and a modern rice variety that was introduced in the 1990s. The results indicated that farmers overweighted a small probability and risk averse farmers adopted a moisture meter to measure the moisture contents of seeds significantly. With respect to the modern rice variety, farmers f risk attitude did not affect the adoption. Our results and the results of a previous study imply that the type of risk and uncertainty faced by farmers at the time of decision-making of its adoption partly determine the effect of risk attitude on agricultural adoption.

Keywords: technology adoption; risk preferences; prospect theory (search for similar items in EconPapers)
JEL-codes: O14 O33 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2014-02
New Economics Papers: this item is included in nep-agr, nep-dev, nep-sea and nep-upt
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