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

Paulina Oliva; B. Kelsey Jack; Samuel Bell; Elizabeth Mettetal; Christopher Severen

doi:10.1162/rest_a_00823

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

Paulina Oliva¹; B. Kelsey Jack²; Samuel Bell³; Elizabeth Mettetal⁴; Christopher Severen⁵

¹ University of Southern California · ² University of California, Santa Barbara and NBER · ³ Oregon State University and Shared Value Africa · ⁴ Abt Associates · ⁵ Federal Reserve Bank of Philadelphia

The Review of Economics and Statistics 2020 open access

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.

DOI: 10.1162/rest_a_00823
Volume: 102 (3)
Pages: 617-632
Language: en
Export: BibTeX
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