An analysis of technology adoption decisions by poor farmers is provided. Some possible empirical models for studying technology adoption are reviewed. The issue of theoretical consistency is dealt with in terms of the costs of such consistency, measured in data needs and model complexity, and the benefits, measured in terms of understanding the micro-economic foundations of adoption.

This paper analyzes the economic role and performance of a type of financial institution which is observed worldwide: rotating savings and credit associations (Roscas). Using a model in which individuals save for an indivisible durable consumption good, we study Roscas which distribute funds using random allocation and bidding. Each type of Roscas allows individuals without access to credit markets to improve their welfare, but under a reasonable assumption on preferences, random allocation is preferred when individuals have identical tastes. This conclusion need not hold when individuals are heterogeneous. We also discuss the sustainability of Roscas given the possibility of default.