Technological Innovations, Downside Risk, and the Modernization of Agriculture
AbstractWe 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.
CitationEmerick, Kyle, Alain de Janvry, Elisabeth Sadoulet, and Manzoor H. Dar. 2016. "Technological Innovations, Downside Risk, and the Modernization of Agriculture." American Economic Review, 106 (6): 1537-61. DOI: 10.1257/aer.20150474
- O13 Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
- O33 Technological Change: Choices and Consequences; Diffusion Processes
- Q14 Agricultural Finance
- Q15 Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
- Q16 Agricultural R&D; Agricultural Technology; Biofuels; Agricultural Extension Services