Nudging Farmers to Use Fertilizer: Theory and Experimental Evidence from Kenya
American Economic Review
vol. 101,
no. 6, October 2011
(pp. 2350-90)
Abstract
We model farmers as facing small fixed costs of purchasing fertilizer and assume some are stochastically present biased and not fully sophisticated about this bias. Such farmers may procrastinate, postponing fertilizer purchases until later periods, when they may be too impatient to purchase fertilizer. Consistent with the model, many farmers in Western Kenya fail to take advantage of apparently profitable fertilizer investments, but they do invest in response to small, time-limited discounts on the cost of acquiring fertilizer (free delivery) just after harvest. Calibration suggests that this policy can yield higher welfare than either laissez-faire policies or heavy subsidies. (JEL Q13, Q12, Q16, Q18)Citation
Duflo, Esther, Michael Kremer, and Jonathan Robinson. 2011. "Nudging Farmers to Use Fertilizer: Theory and Experimental Evidence from Kenya." American Economic Review, 101 (6): 2350-90. DOI: 10.1257/aer.101.6.2350Additional Materials
JEL Classification
- Q12 Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
- Q13 Agricultural Markets and Marketing; Cooperatives; Agribusiness
- Q16 Agricultural R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
- Q18 Agricultural Policy; Food Policy