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American Economic Review Vol. 106 No. 6 2016

Technological Innovations, Downside Risk, and the Modernization of Agriculture

Kyle Emerick1; Alain de Janvry2; Elisabeth Sadoulet2; Manzoor H. Dar3

1 Tufts University, 8 Upper Campus Road, Medford, MA 02155-6722 (e-mail: ) · 2 University of California, Berkeley, 207 Giannini Hall, Berkeley, CA 94720-3310 (e-mail: ) · 3 International Rice Research Institute, New Delhi, India (e-mail: )

Abstract

We use a randomized experiment in India to show that improved technology enhances agricultural productivity by crowding in modern inputs and cultivation practices. Specifically, we show that a new rice variety that reduces downside risk by providing flood tolerance has positive effects on adoption of a more labor-intensive planting method, area cultivated, fertilizer usage, and credit utilization. We find that a large share of the expected gains from the technology comes from crowding in of other investments. Therefore, improved technologies that reduce risk by protecting production in bad years have the potential to increase agricultural productivity in normal years.

DOI
10.1257/aer.20150474
Volume
106
Issue
6
Pages
1537-1561
Language
en
Sources
bibtex:phds-export.bib crossref openalex

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