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Technology Adoption under Uncertainty: Take-Up and Subsequent Investment in Zambia

Author

Listed:
  • Paulina Oliva

    (University of Southern California)

  • B. Kelsey Jack

    (University of California, Santa Barbara, and NBER)

  • Samuel Bell

    (Oregon State University and Shared Value Africa)

  • Elizabeth Mettetal

    (Abt Associates)

  • Christopher Severen

    (Federal Reserve Bank of Philadelphia)

Abstract
Technology adoption often requires multiple stages of investment. As new information emerges, agents may abandon a technology that was profitable in expectation. We use a field experiment to vary the payoffs at two stages of investment in a new technology: a tree species that provides on-farm fertilizer benefits. Farmer decisions identify the information about profitability that arrives between the take-up and follow-through stages. Results show that this form of uncertainty increases take-up but lowers average tree survival, decreasing the cost-effectiveness of take-up subsidies. Thus, uncertainty offers another explanation for why even costly technologies may go unused or be abandoned.

Suggested Citation

  • Paulina Oliva & B. Kelsey Jack & Samuel Bell & Elizabeth Mettetal & Christopher Severen, 2020. "Technology Adoption under Uncertainty: Take-Up and Subsequent Investment in Zambia," The Review of Economics and Statistics, MIT Press, vol. 102(3), pages 617-632, July.
    • Handle: RePEc:tpr:restat:v:102:y:2020:i:3:p:617-632
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    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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